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1913 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


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HORNBOOK  CASE  SERIES 


ILLUSTRATIVE   CASES 

. » _ 

.  ONj-. . 

i> 

THE  LAW  iofeSALES 


By   ROGER  W.  COOLEY,    LL.  M. 

hi 

Professor  of  Law,  University  of  North  Dakota 

Author  of    'Briefs  on  the  Law  of  Insurance,'    "Law  of  Municipal  Corpora- 
tions," "Illustrative   Cases  on  Persons  and   Domestic   Relations," 
"Illustrative  Cases  on  Damages,"   "Illustrative  Cases  on 
Insurance"    and    "Illustrative   Cases   on 
Municipal    Corporations" 


A  COMPANION  BOOK 

TO 

TIFFANY  ON  SALES  (2d  Ed.) 


St.  Paul,  Minn. 

WEST  PUBLISHING   CO. 

1913 


Copyright,  1913 

BY 

WEST  PUBLISHING  COMPANY 
(Cooley  Cases  Sales) 

cnMs 

1913 


THE  HORNBOOK  CASE  SERIES 


It  is  the  purpose  of  the  publishers  to  supply  a  set  of  Illustrative 
Casebooks  to  accompany  the  various  volumes  of  the  Hornbook  Series, 
to  be  used  in  connection  with  the  Hornbooks  for  instruction  in  the 
classroom.  The  object  of  these  Casebooks  is  to  illustrate  the  prin- 
ciples of  law  as  set  forth  and  discussed  in  the  volumes  of  the  Horn- 
book Series.  The  text-book  sets  forth  in  a  clear  and  concise  manner 
the  principles  of  the  subject;  the  Casebook  shows  how  these  princi- 
ples have  been  applied  by  the  courts,  and  embodied  in  the  case  law. 
With  instruction  and  study  along  these  lines,  the  student  should  se- 
cure a  fundamental  knowledge  and  grasp  of  the  subject.  The  cases 
on  a  particular  subject  are  sufficiently  numerous  and  varied  to  cover 
the  main  underlying  principles  and  essentials.  Unlike  casebooks 
prepared  for  the  "Case  Method"  of  instruction,  no  attempt  has  been 
made  to  supply  a  comprehensive  knowledge  of  the  subject  from  the 
cases  alone.  It  should  be  remembered  that  the  basis  of  the  instruc- 
tion is  the  text-book,  and  that  the  purpose  of  these  Casebooks  is  to 
illustrate  the  practical  application  of  the  principles  of  the  law. 

West  Publishing  Company. 
(iii)* 


729229 


TABLE  OF  CONTENTS 


FORMATION  OF  THE  CONTRACT 

Page 

I.     Sale  Distinguished  From  Other  Transactions 1 

II.     Who   Can    Sell 10 

III.     Subject-Matter  of  Sale 25 

FORMATION  OF  CONTRACT— UNDER  THE   STATUTE  OF 

FRAUDS 

I.  What  Contracts  are  Within  the  Statute 41 

1.  Contracts  for  Work,  Labor,  and  Materials 41 

2.  Contract  for  Resale 51 

II.  What  Are  Goods,  Wares  and  Merchandise 55 

1.  Incorporeal  Property 55 

2.  Interest  in  Land — Fourth  Section  of  the  Statute 56 

III.  Acceptance  and  Receipt 59 

1.  Acceptance   59 

2.  Actual   Receipt 02 

IV.  Earnest  or  Part  Payment 67 

V.     The  Note  or  Memorandum — Agents  Authorized  to  Sign 70 

VI.     Effect  of  Noncompliance  with  the  Statute 74 

EFEECT  OF  THE  CONTRACT  IN  TASSING  THE  PROPERTY— 
SALE  OF   SPECIFIC  GOODS 

I.     In  General TO 

II.  Rules  for  Ascertaining  Intention S5 

III.  Reservation  of  Right  of  Possession  of  Property 86 

1.    Conditional   Sales 86 

J.     I ;  1 5k  of  Loss KM 

IV.  Bale  on  Approval  or  Trial 103 

V.     Sale  or   Return 105 

EFFECT  OF  CONTRACT  IN  PASSING  THE  PROPERTY- 
SALE  OF   GOODS  NOT  SPECIFIC 

I.  In  General 10S 

II.  Subsequent  Appropriation m 

l.    In  General ,n 

'_'.    Appropriation  by  Act  of  Seller 118 

III.  Reservation  of  Right  of  Possession  or  Property 124 

FRAUD  AND  RETENTION  OF  POSSESSION 

I.    Contract  or  Sale  Induced  by  Fraud 131 

II.  Remedies  of  Defrauded  Party ,;:i 

l.     Bona   Fide  Purchasers  from  Fraudulenl   Buyer L31 

•j.     Fraudulenl    Impersonation 139 

in.    i  raud  on  Creditors '  1:- 

IV.  How  far  Delivery  is  Essential  to  Transfer  Property  Agalnsi  Cr< 

tors  and  Purchasers Il1 

Com  i   ,  '  (v) 


Vl  TABLE  OF   CONTENTS 

ILLEGALITY 

Page 

I.     Rales  Prohibited  by  Common  Law 148 

II.     Sales  Trobibited  by  Statute 152 

III.     Effect  of  Illegality 15S 

CONDITIONS  AND  WARRANTIES 

I.  In  General 166 

II.  Warranties   172 

III.  Implied  Warranty  of  Title 185 

IV.  Implied  Warranty  in  Sale  by  Description 191 

V.     Implied  Warranty  of  Quality 197 

VI.     Implied  Warranty  in  Sale  by  Sample 204 

PERFORMANCE  OF  CONTRACT 

I.     In    General 209 

II.  Delivery  of  Wrong  Quantity 211 

III.  Delivery  by  Installments 212 

IV.  Delivery  to  Carrier 221 

V.     Buyer's  Right  to  Examine  Goods 225 

VI.     Acceptance    227 

VII.     Excuses  for  Nonperformance  of  Conditions 228 

1.  Renunciation  of  Contract 228 

2.  Insolvency  of  Buyer 236 

RIGHT  OF  UNPAID  SELLER  AGAINST  THE  GOODS 

I.     Seller's  Lien , 237 

II.  Stoppage  in  Transitu 246 

1.  Against  Whom  Right  May  be  Exercised 246 

2.  Termination  of  Transit 249 

III.  Right  of  Resale 254 

IV.  Right  to  Rescind 260 

ACTIONS  FOR  BREACH  OF  CONTRACT 

I.     Remedies  of  the  Seller — Damages  for  Nonacceptance 264 

II.  Remedies  of  the  Buyer — Damages  for  Nondelivery 266 

III.  Breach  of  Warranty — Rights  after  Acceptance 269 

1.  In  General 269 

2.  Rescission  272 

3.  Breach  of  Implied  Warranty 275 

4.  Diminution  of  Damages — Recoupment 2S2 


TABLE     OF  CASES 


Page 
Adam,  Meldrum  &  Anderson   Co. 

v.   Stewart 131,  136 

Andrews  v.  Cheney 116 

Bagby  v.   Walker 44,  227 

Becker  v.  Hallgarten 251 

Bergan  v.  Magnus 84 

Blackmore  v.  Fairbanks,  Morse  & 

Co 1S3,  202 

Blunienthal  v.  Stahle 266 

Bridges  v.  Bridges 159 

Brigham  v.  Hibbard 120 

Brownfield  v.  Johnson 10S,  211 

Canham  v.  Piano  Mfg.  Co 272 

Carleton    v.    Lombard,    Ayres    & 

Co 176,  202 

Case  Plow  Works  v.  Niles  &  Scott 

Co 172,  20S 

Commercial    Bank    of    Selma    v. 

Hurt 10 

Commonwealth  v.  Fleming Ill 

Coyle  v.  Baum 197 

Cresswell  Ranch  &  Cattle  Co.  v. 

Martindale   214 

f'rummey  v.  Raudenbush 243 

Cundy  v.  Lindsay 131,  139 

Davis  v.  Gilliam 209 

Diem  v.  Koblltz 236,  254 

Dorsey  v.  Pike 62 

Dunham  v.  Ilootman 70 

I  tanlop,  In  re 161 

Dunlop  v.  Mercer 161 

Dustan  v.  McAndrew 259,  260 

Edgar    v.    Joseph    Bre<k    &    Sons 

Corp L95 

ra  v.  Eaddem u< ;; » 

i  v.  Cummlngs 154 

I  (age  v.  Carpenter 191 

'  roti ]< ]  v.  Bourgeois 188 

Gould  v.  Stein 204 

Grantham  v.   Hawley 80 

Graves  v.  Johneon 149 

COOLEY  (   A-l  S  SAI.K8  (v 


Pnefl 

Greenwood  v.  Law 55 

Guinzburg  v.  H.  W.  Downs  Co. .  .     10 

Hall  v.  Glass. , 25 

Harkness  v.  Russell  &  Co 86 

Heintz  v.  Burkhard 48 

Holroyd  v.  Marshall 31 

House  v.  Beak 105 

Hunt  v.  Wyman 103 


Jackson  v.  Tupper 67 

Jetton  v.  Tobey 22 

J.  I.  Case  Plow  Works  v.  Niles  A: 

Scott    Co 172,  208 

Johnston  v.  Faxon -f,7 

Johnston  v.  Trask 51 

Kelley  v.  Cosgrove 152 

Kelsea   v.   Ramsey   &   Gore   Mfg. 

Co 223 

Kingman  v.  Denison 246 

Kirven  v.  Pinckney 144 

Knights  v.  Brown 150 

Lee  v.  Griffin 41 

Lingham  v.  Eggleston 79,  85 

McElwee  v.  Metropolitan  Lumber 

Co 237 

Martin   v.    Marshall 142 

Materne  v.  Ilorwitz 148 

Moors  v.  Wyman 126 

Murchie  v.  Cornell 203 

Murphy  v.  Sagola  Lumber  Co 225 

New  England  Dressed  Meal  & 
Wool  Co.  v.  Standard   Worsted 

Co 121 

Northwestern  Cordage  Co.  v.  Rice 

275,  282 


O'Connor's  Adm'a:  v.  Clark. 


'20 


F'arry  v.  Llbbey 146 

People's  Furniture  &  Carpel   <'<>. 

v.  Crosby '.»!» 

Piano  Mfg.  Go.  v.  Ellis 169 


Vlll 


TABLE    OF    CASES 


Page 

Pope  v.  Allis 166 

Providence  Coal  Co.  v.  Coxe 212 

I  testad  v.  Engemoen S5 

Koehm  v.  Horst 228 

Sattler  v.  Hallock 1 

Schloss  v.  Fel t  us 131 

Seollans  v.  Rollins 17 

Singer  Mfg.  Co.  v.  Draper 158 

Singer  Mfg.  Co.  v.  Looney 158 

Smith  v.  Edwards 118 

Snider  v.  Thrall 65 

Spooner  v.  Curumings 97 

State  v.  Stockman 6 


Page 

Stuart  v.  Pennis 56 

Symns  v.  Schotten 249 

Talbot  Pav.  Co.  v.  Gorman..  .279,  282 

Tift  v.  Wight  &  Weslosky  Co 74 

Tompkins  v.  Sheehan 59 

Tufts  v.  Griffin ioi 

Underwood  v.   Wolf 282 

Unexcelled   Fireworks  Co.  v.   Po- 
ntes      264 

Weir  v.  Hudnut 68 

Wheelnouse  v.  Parr 221 

Wigton  v.  Bowley 124 


HORNBOOK  CASES  ON 

SALES 


FORMATION  OF  THE  CONTRACT 
I.  Sale  Distinguished  From  Other  Transactions1 


SATTLER  v.  HATXOCK. 

(Court  of  Appeals  of  New  York,  1899.     1G0  N.  Y.  291,  54  N.  E.  667,  46  T* 

R.  A.  679.  73  Am.  St.  Rep.  686.) 

Action  by  Theodore  Sattler,  assignee,  against  George  W.  Hallock  and 
others,  for  conversion.  From  a  judgment  of  the  appellate  division  af- 
firming a  judgment  entered  on  a  verdict  in  favor  of  defendants  and  an 
order  denying  a  new  trial  (44  N.  Y.  Supp.  543),  plaintiff  appeals. 

Martin,  J.  On  the  21st  day  of  February,  1895,  25  farmers,  resi- 
dents of  the  town  of  Smithville,  L.  I.,  were  the  owners  of  a  building 
or  premises  used  as  a  pickle  factory,  situated  in  that  town.  On  that  day 
they  entered  into  a  written  agreement  with  the  firm  of  John  A.  Meier- 
diercks  &  Sons,  in  relation  to  the  production,  manufacture,  and  sale  of 
pickles,  sauerkraut,  and  other  like  products. 

So  far  as  material  to  the  question  involved,  the  contract  was  sub- 
stantially as  follows  :  The  parties  agreed  to  organize  a  responsible  com- 
pany or  corporation  for  the  purpose  of  conducting  or  aiding  in  the  pro- 
duction and  manufacture  of  the  articles  referred  to  in  the  contract.  It 
then  provided  that  the  farmers  were  to  prepare  and  deliver  to  the  plain- 
tiff's assignors,  at  the  factory,  pickles,  cabbage,  dill,  etc.,  to  be  raised 
upon  an  acreage  which  was  given,  and  at  prices  stated  therein.  If  the 
building  proved  insufficient,  the  farmers  were  to  provide  an  additional 
one  at  a  cost  not  to  exceed  $300,  to  be  paid  by  the  assignors  and  de- 
ducted from  the  net  profits  at  the  end  of  the  season,  they  guarantying 
that  such  profits  should  amount  to  at  least  that  sum.  If  they  were 
more  than  the  cost  of  the  building,  then  the  farmers  were  to  receive  20 
per  cent,  thereof,  to  be  divided  between  them  according  to  the  amount 
of  produce  furnished  by  each.  The  as  ignors  were  to  take  the  pickles, 
cabbage,  and  other  produce,  pay  the  prices  named  at  the  times  and  in  the 
manner  stated,  furnish  the  labor,  machinery,  barrels,  tanks,  salt,  spices, 

*  For  discussion  of  principles,  see  Tiffany,  Bales  (2d  Kd.)  §  5. 
Cooley  Cases  Balm — 1 


2,  FORMATION    OF    THE    CONTRACT 

and  other  necessary  material,  and  pay  the  freight  and  cartage.  These 
expenses  were  to  he  deducted  from  the  gross  receipts  of  the  sales  of  the 
pickles,  sauerkraut,  and  other  goods  so  manufactured.  A  list  was  then 
given  of  the  number  of  acres  of  each  kind  of  produce  which  was  to  he 
furnished  by  each  of  the  25  farmers  named.  To  receive  products  at 
the  factory,  the  assignors  were  to  furnish  one  man  and  the  farmers  an- 
other, who  were  to  attend  to  their  reception,  and  decide  all  matters  of 
dispute  in  relation  to  them.  The  representative  of  the  farmers  was  to 
be  given  full  and  complete  data  of  all  the  produce  delivered,  and  all 
barrels,  salt,  spices,  and  utensils  furnished,  and  all  the  goods  of  every 
description  received  and  shipped  by  the  assignors,  so  as  to  show  the 
gross  receipts  and  expenses  for  the  year.  The  agreement  then  pro- 
vides :  "The  manufacture  and  sale  of  all  the  products  of  the  Long 
Island  Farmers'  Co.  shall  be  done  by  J.  A.  Meierdiercks  &  Sons. 
*  *  *  It  is  hereby  agreed  by  the  undersigned,  of  the  Long  Island 
Farmers'  Company,  that  at  any  time  should  the  business  of  the  Long 
Island  Farmers'  Company  cease,  and  the  property,  including  buildings, 
utensils,  bbls.,  etc.,  be  sold  or  bartered,  the  members  of  the  Long  Island 
Farmers'  Company,  other  than  J.  A.  Meierdiercks  &  Sons,  guaranty 
to  J.  A.  Meierdiercks  &  Sous  35  per  cent,  of  the  amount  realized." 
This  agreement  was  signed  by  the  25  farmers  mentioned,  and  by  the 
plaintiff's  assignors. 

Subsequently,  the  Long  Island  Farmers'  Company  was  organized  in 
accordance  with  the  contract.  By-laws  were  passed,  and  the  defendants 
were  elected  as  its  managing  officers.  Soon  after  the  execution  of  the 
contract,  the  plaintiff's  assignors  went  to  the  factory,  proceeded  to  man- 
ufacture the  produce  which  was  delivered  under  it,  and  continued  that 
business  until  they  made  a  general  assignment  to  the  plaintiff.  The 
keys  of  the  factory  were  retained  by,  and  continued  in  the  possession 
of,  a  representative  of  the  farmers,  who,  after  the  produce  was  deliv- 
ered at  the  factory  and  manufactured,  shipped  it  to  various  purchasers. 
During  the  continuance  of  this  business,  the  executive  officers  of  the 
farmers'  company,  or  some  of  them,  were  usually  present  at  the  factory, 
and  engaged  in  looking  after  the  business  there  transacted.  They  gave 
directions,  passed  judgment  upon  the  quality  of  the  produce,  and  were 
often  consulted  by  the  assignors'  representative  in  regard  to  affairs  con- 
nected with  the  business.  Although  the  manufactured  products  were 
sold  by  the  plaintiff's  assignors,  they  were  billed,  "J.  A.  Meierdiercks  & 
Sons,  Agents  Long  Island  Farmers'  Company."  These  bills  were  sent, 
and  checks  drawn  to  the  order  of  the  company  were  received,  when  the 
assignors  requested  the  committee  of  the  company  to  give  them  a  power 
of  attorney  to  indorse  them,  which  it  refused  to  do.  On  the  17th  of 
September,  1896,  the  firm  of  John  A.  Meierdiercks  &  Sons  made  a  gen- 
eral assignment  to  the  plaintiff  for  the  benefit  of  its  creditors.  Subse- 
quently the  plaintiff  went  to  the  factory  at  Smithtown,  and  demanded 
all  the  products,  manufactured  and  unmanufactured,  claiming  that  they 


SALE    DISTINGUISHED   FROM    OTHER   TRANSACTIONS  O 

were  owned  by  the  assignors  at  the  time  of  the  assignment,  and  were 
a  part  of  the  assets  of  that  firm.  With  this  demand  the  managers  of 
the  company  refused  to  comply,  claiming  that  by  the  terms  of  the  agree- 
ment the  company  and  the  farmers  it  represented  were  the  lawful  own- 
ers of  such  products. 

This  action  was  to  recover  their  value  at  the  factory  at  the  time  of 
the  assignment,  upon  the  ground  that  the  defendants  had  wrongfully 
converted  them  to  their  own  use.  The  defendants  alleged  title  in  the 
Long  Island  Farmers'  Company,  and  that  they,  as  its  representatives, 
were  entitled  to  the  possession  of  the  property.  Thus  is  it  obvious  that 
the  single  question  involved  is  whether,  under  the  contract  between 
the  parties,  the  title  to  the  property  in  suit  vested  in  the  plaintiff's  as- 
signors and  was  transferred  to  him  by  the  assignment,  or  whether  it 
remained  in  the  farmers'  company  or  the  farmers  furnishing  it.  On  the 
trial  the  court  held  that  the  contract  imported  a  sale,  but  submitted  to 
the  jury  the  question  whether,  under  the  facts  and  circumstances 
proved,  including  the  acts  of  the  parties,  the  contract  had  been  substan- 
tially altered,  so  that  the  title  rested  in  the  defendants  or  the  company 
or  persons  they  represented.  The  jury  found  for  the  defendants.  The 
appellate  division,  however,  held  that  the  evidence  was  not  sufficient 
to  justify  the  submission  of  that  question  to  the  jury,  but  that  the  con- 
tract between  the  parties  was  one  of  bailment  or  partnership,  and  not 
of  sale,  and  hence  the  plaintiff  was  not  entitled  to  recover,  and  judg- 
ment for  the  defendants  was  properly  rendered. 

With  this  situation,  it  is  obvious  that  the  determination  of  the  courts 
below  can  be  sustained  only  in  case  the  transaction  between  the  parties 
a  bailment  or  joint  enterprise.  If  it  was  a  bailment,  manifest- 
ly the  defendants  were  entitled  to  retain  the  possession  of  the  prop- 
erty. If  it  was  a  joint  enterprise,  the  plaintiff  could  not  recover 
in  an  action  for  the  conversion  of  the  property,  as  the  defend- 
ants were  entitled  to  its  possession,  as  against  the  plaintiff,  un- 
til the  matters  arising  under  the  contract  were  adjusted.  We 
fully  agree  with  the  learned  appellate  division  that  there  was  no 
evidence  to  justify  the  trial  court  in  submitting  to  the  jury  the  question 
of  an  alteration  or  modification  of  the  original  .agreement.  Therefore 
the  real  question  we  are  called  upon  to  decide  is  whether  the  agreement 
of  the  parties  imported  a  sale  of  the  property  to  the  plaintiff's  assignors, 
[f  it  did.  and  the  title  passed,  then  the  plaintiff  is  entitled  to  recover; 
if  not,  then  the  judgment  is  right,  and  should  be  affirmed.  In  the 
construction  of  contracts,  where  there  is  no  ambiguity,  it  is  the  duty  of 
court  to  determine  their  meaning.  Moreover,  where  the  terms  and 
language  of  the  contracl  are  not  disputed,  its  legal  effect  is  a  question 

of  law,  to  he  determined  by  tin-  court.     It  is  always  the  duty  of  a  court, 
in  construing  a  written  instrument,  if  possible,  to  ascertain  the  inten- 
tion of  the  parties;  and,  iii  order  to  determine  its  proper  construction, 
rt  musl  hi-  had  to  the  instrument  as  a  whole,  and  effect  musl  he 


4  FORMATION    OP    THE    CONTRACT 

given  to  every  clause  and  part  thereof,  when  it  can  be  done  without  vio- 
lence.   Ripley  v.  Larmouth,  56  Barb.  21. 

With  these  principles  in  mind,  we  approach  the  question  whether,  un- 
der the  provisions  of  this  contract,  the  plaintiff's  assignors  were  bailees 
of  the  property,  or  whether  the  contract  was  one  of  purchase  and  sale. 
One  of  the  distinctions  between  a  bailment  and  a  sale  is  correctly 
pointed  out  in  the  dissenting  opinion  of  Bronson,  C.  J.,  in  Mallory  v. 
Willis,  4  N.  Y.  76,  85,  as  follows :  "When  the  identical  thing  delivered, 
though  in  an  altered  form,  is  to  be  restored,  the  contract  is  one  of 
bailment,  and  the  title  to  the  property  is  not  changed."  Foster  v.  Petti- 
bone,  7  N.  Y.  435,  57  Am.  Dec.  530.  There  are,  however,  other  prin- 
ciples applicable  to  the  question.  Thus,  when  property  in  an  unmanu- 
factured state  is  delivered  by  one  person  to  another,  upon  an  agreement 
that  it  should  be  manufactured  or  improved  by  his  labor  and  skill,  and 
when  thus  improved  in  value  should  be  divided  in  certain  proportions 
between  the  respective  parties,  it  constitutes  a  bailment,  and  the  orig- 
inal owner  retains  his  exclusive  title  to  the  property  until  the  contract 
is  completely  executed,  although  the  labor  to  be  performed  by  the 
bailee  may  be  equal  or  even  greater  in  value  than  that  of  the  property 
when  received  by  him.  Beardsley,  J.,  in  Gregory  v.  Stryker,  2  Denio, 
631. 

Again,  the  relation  is  that  of  bailor  and  bailee,  where  the  property 
is  thus  delivered  to  be  manufactured  or  improved,  and  afterwards  there 
is  to  be  a  sale  and  a  return  or  a  division  of  the  proceeds.  Stewart  v. 
Stone,  127  N.  Y.  500,  28  N.  E.  595.  In  Hyde  v.  Cookson,  21  Barb.  92, 
there  was  a  written  agreement  between  the  plaintiffs  and  one  Osborn  in 
relation  to  tanning  a  quantity  of  hides.  The  hides  were  to  be  furnished 
by  the  plaintiffs  on  a  commission  of  5  per  cent,  for  buying  and  6  per 
cent,  for  selling  the  leather.  Osborn  was  to  take  the  hides  to  his  tan- 
nery, manufacture  them  into'  hemlock  sole  leather,  and  return  it  to  the 
plaintiffs,  who  were  to  sell  it  in  their  discretion.  When  sold,  the  ac- 
count was  to  be  made  up,  and  the  net  proceeds  of  the  sales,  after  de- 
ducting the  costs  of  hides,  commissions,  interest,  insurance,  and  other 
expenses,  were  to  be  the  profit  or  loss  to  accrue  to  Osborn  in  full  for 
tanning  the  hides ;  and  it  was  held  that  this  was  not  a  contract  of  sale, 
but  of  bailment,  and  that  the  title  remained  in  the  plaintiffs.  In  Pierce 
v.  Schenck,  3  Hill,  28,  logs  were  delivered  at  a  sawmill  under  a  contract 
with  the  person  running  the  mill  that  he  would  saw  them  into  boards, 
and  that  each  party  should  have  one-half.  It  was  held  that  the  trans- 
action was  a  bailment;  that  the  bailor  retained  his  general  property 
in  the  logs  until  they  were  all  manufactured  in  pursuance  of  the  con- 
tract; and  that,  as  between  the  parties,  the  bailee  acquired  no  interest 
in  any  of  the  boards  manufactured  by  mere  part  performance  within 
the  time.  In  Mallory  v.  Willis,  4  N.  Y.  76,  the  plaintiffs  agreed  to  de- 
liver merchantable  wheat  at  a  flour  mill  carried  on  by  the  defendant  to 
be  manufactured  into  flour.     The  defendant  agreed  to  deliver   196 


SALE    DISTINGUISHED   FROM   OTHER   TRANSACTIONS  5 

pounds  of  superfine  flour,  packed  in  barrels  to  be  furnished  by  the  plain- 
tiffs, for  every  4  bushels  and  15  pounds  of  wheat.  He  was  to  be  paid 
16  cents  per  barrel,  and  2  cents  extra  in  case  the  plaintiffs  made  1  shil- 
ling net  profit  on  each  barrel  of  flour.  The  defendant  was  to  guaranty 
the  inspection.  The  plaintiffs  were  to  have  the  offals  or  feed,  which 
the  defendant  was  to  store  until  sold.  This  court  held  in  that  case  that 
the  contract  imported  a  bailment,  and  not  a  sale.  The  doctrine  of  that 
case  was  indorsed  in  Foster  v.  Pettibone,  7  N.  Y.  433,  57  Am.  Dec.  530. 
In  Mack  v.  Snell,  140  N.  Y.  193,  35  N.  E.  493,  37  Am.  St.  Rep.  534,  the 
parties  entered  into  a  contract  by  which  the  plaintiff  agreed  to  manu- 
facture for  the  defendant  1,000  pairs  of  pruning  shears,  to  be  in  all  re- 
spects like  a  sample  furnished,  the  defendant  to  furnish  the  rough  cast- 
ings for  the  handles,  and  the  plaintiff  to  furnish  the  blades.  It  was 
held  that  the  contract  was  one  of  bailment,  and  not  of  purchase  and 
sale,  so  that  the  title  to  the  shears  manufactured  was  at  all  times  in  the 
defendant. 

Applying  these  principles  to  the  contract  under  consideration,  we 
think  it  is  quite  obvious  that  it  was  one  of  bailment,  and  not  of  purchase 
and  sale.  Under  its  terms,  the  parties  represented  by  the  defendants 
were  to  furnish  certain  specified  amounts  of  farm  produce,  which  was 
to  be  delivered  at  a  factory  owned  by  them,  and  manufactured  into 
pickles,  sauerkraut,  and  other  similar  articles.  It  was  to  be  received 
jointly  by  a  representative  of  the  plaintiff's  assignors  and  a  representa- 
tive of  the  farmers.  The  plaintiff's  assignors  were  to  pay  the  prices 
named  for  the  produce  furnished,  to  furnish  the  labor,  machinery,  and 
materials,  such  as  salt,  spices,  barrels,  and  other  necessary  articles  and 
utensils,  and  to  pay  the  freight  and  cartage.  The  amount  thus  ex- 
pended was  to  be  deducted  from  the  gross  receipts  of  the  sales  of  the 
articles  manufactured,  and  the  representative  of  the  farmers  was  to  be 
furnished  with  a  full  account  of  all  of  the  transactions  connected  with 
the  business.  The  manufacture  and  sale  of  the  products  of  the  Long 
Island  Farmers'  Company  were  to  be  done  and  made  by  the  plaintiff's 
assignors,  and  the  net  proceeds  were  to  be  divided  by  paying  20  per 
cent,  to  the  farmers  or  for  their  benefit,  and  the  assignors  to  have  80 
per  cent.  Thus  the  produce  was  to  be  furnished  by  the  persons  repre- 
sented by  the  defendants,  was  to  be  manufactured  by  the  plaintiff's 
assignors,  to  be  sold  as  the  products  of  the  Long  Island  Farmers'  Com- 
pany, and  the  net  profits  divided.  The  raw  material,  which  was  owned 
by  parties  the  defendants  represent,  was  delivered  to  the  plaintiff's  as- 
signors, to  be  improved  by  their  labor  and  skill.  It  was  then  to  be 
sold,  and  the  net  value  divided  in  the  proportions  named.  So  that, 
rly  within  the  principle  of  the  Gregory  and  other  kindred  cases,  the 
owners  of  the  prodmc  thus  delivered  retained  their  title  to  the  prop- 
erty until  the  contract  had  been  completely  executed,  and  this  without 
regard  to  the  value  of  the  labor  performed  upon  it  by  the  plaintiff's  as- 


G  FORMATION    OF    THE    CONTRACT 

signors  as  such  bailees.  We  think,  when  this  entire  contract  is  exam- 
ined and  understood,  it  clearly  imports  a  bailment,  and  not  a  sale. 

It  is  also  quite  manifest  that  the  parties  understood  such  to  be  the 
nature  of  the  agreement  between  them.  This  is  shown  by  the  facts  that 
the  property,  after  it  was  manufactured,  was  shipped  from  the  factory 
by  the  company;  that  the  plaintiff's  assignors,  acting  under  this  con- 
tract, in  selling  the  manufactured  produce,  caused  the  bills  to  be  sent 
to  purchasers  in  the  name  of  the  company,  with  their  names  thereon  as 
agents ;  that  checks  were  taken  therefor  drawn  to  the  order  of  the 
company,  in  accordance  with  the  bills  sent;  that  the  assignors  asked 
for  a  power  of  attorney  authorizing  them  to  indorse  the  same;  that 
the  representatives  of  the  farmers  were  present  at  the  factory,  and  that 
they  gave  directions  as  to  the  management  of  the  business  there  car- 
ried on.  All  these  facts  tend  to  show  with  convincing  certainty  that  the 
plaintiff's  assignors,  as  well  as  the  other  parties  to  the  contract,  under- 
stood it  to  be  one  of  bailment,  where  the  property  was  to  be  furnished 
by  the  latter,  improved  by  the  former,  and  the  net  profits  divided.  If 
this  contract  is  to  be  regarded  as  somewhat  indefinite  or  ambiguous, 
we  may  resort  to  the  surrounding  facts  and  circumstances  as  they  ex- 
isted when  it  was  made  to  aid  us  in  its  interpretation,  and  also  consider 
the  practical  construction  which  the  parties  have  given  it.  Its  interpre- 
tation by  them  is  a  consideration  of  importance.  As  was  said  by 
Swayne,  J.,  in  Insurance  Co.  v.  Dutcher,  95  U.  S.  269,  273  (24  E.  Ed. 
410) :  "The  construction  of  a  contract  is  as  much  a  part  of  it  as  any- 
thing else.  There  is  no  surer  way  to  find  out  what  parties  meant  than 
to  see  what  they  have  done."  Woolsey  v.  Funke,  121  N.  Y.  87,  24 
N.  E.  191. 

It  follows  from  the  conclusion  we  have  reached  as  to  the  character 
of  the  contract  and  the  relation  existing  between  the  parties  that  the 
judgment  must  be  affirmed,  as  the  agreement  between  them  consti- 
tuted a  bailment  of  the  property  in  question,  and  the  plaintiff's  as- 
signors acquired  no  such  title  as  would  enable  them  to  maintain  an  ac- 
tion for  its  conversion.  The  judgment  should  be  affirmed,  with  costs. 
All  concur.    Judgment  affirmed. 


STATE  v.   STOCKMAN. 

(Supreme  Court  of  Oregon,  1S96.     30  Or.  36,  46  Pac.  S51.) 

John  R.  Stockman  was  convicted  of  a  violation  of  the  act  commonly 
known  as  the  "Warehouse  Act"  by  shipping  wheat,  stored  in  a  ware- 
house of  which  he  was  the  manager,  without  the  written  assent  of  the 
holder  of  the  receipt  therefor,  and  he  appeals. 

Bean,  J.  The  defendant  was  convicted  of  a  violation  of  section  4 
of  the  act  of  1885,  commonly  known  as  the  "Warehouse  Act,"  being 
section  4204  of  Hill's  Annotated  Laws,  by  shipping  wheat,  stored  in 


SALE    DISTINGUISHED   FROM    OTHER   TRANSACTIONS  < 

a  warehouse  of  which  he  was  the  manager,  without  the  written  assent 
of  the  holder  of  the  receipt  therefor.  The  facts  are  that  at  the  time 
of  the  commission  of  the  alleged  crime  the  defendant  was  the  manager 
of  the  Red  Crown  Roller  Mills,  a  corporation  owning  and  operating  a 
flouring  mill  in  Albany,  Or.,  and  engaged  in  the  business  of  manufac- 
turing flour  and  other  mill  products  for  sale.  A  part  of  the  mill  build- 
ing was  used  for  the  storage  of  wheat  belonging  to  the  company,  and 
such  as  it  might  receive  f  om  the  neighboring  farmers.  The  wheat  so 
stored  was  all  mixed  in  one  common  mass,  from  which  the  company 
drew  from  day  to  day  for  the  purpose  of  its  business.  In  September, 
1894,  one  E.  D.  Barrett  delivered  to  it  2,19S15/so  bushels  of  wheat,  for 
which  a  receipt  in  the  following  form  was  issued  to  him : 

"Red  Crown  Mills, 
"No.  1,078.  Albany,  Oregon,  Sept.  18,  1894. 

"Received  of  E.  D.  Barrett,  by  self,  two  thousand  one  hundred 
ninety-eight  15/oo  bushel  No.  1  merchantable  wheat,  subject  to  sacks 
and  storage,  .OS  cents  per  bushel,  if  withdrawn  from  mill. 

"Red  Crown  Roller  Mills. 
"2.19815/6o  Bu.  Lyons." 

Immediately  upon  the  receipt  of  the  wheat,  it  was,  with  the  knowl- 
edge and  consent  of  Barrett,  mixed  and  mingled  with  the  other  wheat 
on  hand  at  the  time,  and  was  subsequently  manufactured  into  flour  by 
the  mill  company,  and  sold  for  its  own  use  and  benefit.  No  storage 
was  paid  or  demand  made  for  the  wheat  until  after  the  failure  of  the 
company  in  March,  1895,  when  Barrett  demanded  the  then  market 
value  thereof,  which,  being  refused,  he  tendered  the  storage,  and  de- 
manded a  return  of  the  wheat,  and  obtaining  neither,  commenced  this 
prosecution. 

The  indictment  charges  that  the  defendant,  as  the  manager  of  a 
warehouse  for  the  storage  of  grain,  received  for  storage  therein  the 
wheat  in  question,  issued  a  receipt  therefor,  and  afterwards  sold,  ship- 
ped, transferred,  and  removed  the  same  from  such  warehouse,  and  bc- 
d  his  control,  without  the  written  assent  of  the  holder  of  the  re- 
ceipt. In  order  to  sustain  this  charge,  it  was  incumbent  upon  the  state 
rove  that  the  wheat  in  question  was  in  fact  placed  in  a  warehouse, 
within  the  meaning  of  thai  term  as  used  in  the  statute,  and,  in  addition 
thereto,  that  it  was  placed  therein  on  storage.  A  failure  of  proof  in 
either  particular  would  arily  he  fatal  i"  the  prosecution.     Upon 

the  receipt  i-  ued  to  Barrett  affords  no  solution  of  either  "f 
tioi    .  for  it  i^  silenl  as  t<>  whether  the  building  was  in  fact 
a  warehouse,  and  as  to  whether  the  wheat  w;  eived  on  stor; 

or  \<<v  some  other  purpose ;  and  therefore  resort  could  In-  had  t<>  parol 
evidence  to  ascertain  the  true  character  of  the  bu  iness  in  which  the 
mill  company  was  engaj  well  as  the  terms  on  which  the  wheat 

d.    Lyon  v.  Lenon,  106  tnd.  567,  7  X.  !•"..  311. 

Upon  the  trial,  evideno  ;  en  and  offered  tending  to  show,  and 


8  FORMATION    OF    THE    CONTRACT 

from  which  the  jury  could  have  found,  that  the  mill  company  did  not 
receive  grain  for  storage  or  safe-keeping,  but  that,  according  to  its 
usual  course  of  business,  known  to  its  customers,  and  particularly  to 
Barrett,  all  wheat  received  by  it  was  mixed  with,  and  became  a  part 
of,  the  consumable  stock  of  the  mill,  and  was  manufactured  into  flour 
and  other  mill  products,  and  sold  and  disposed  of  by  the  mill  company 
in  the  usual  course  of  business,  and  that  it  satisfied  its  obligation  to 
the  depositors  by  paying  them  the  market  price  when  demanded,  or  by 
returning  a  like  quantity  and  quality  of  other  wheat.  In  the  former 
case  no  storage  was  charged  or  paid,  but  in  the  latter  a  charge  of  eight 
cents  a  bushel  was  made  for  sacks  and  storage ;  and  this  accounts  for 
the  provision  in  the  receipt  to  Barrett  concerning  the  payment  of  stor- 
age if  the  wheat  should  be  withdrawn  from  the  mill. 

Assuming  these  facts  to  be  true,  as  we  must  for  the  purposes  of  this 
appeal,  the  question  of  law  is  presented  as  to  whether  the  transaction 
comes  within  the  provisions  of  the  act  of  1885.  And,  as  its  solution 
involves  the  merits  of  the  entire  theory  upon  which  the  cause  was  tried 
in  the  court  below,  we  shall  proceed  to  examine  it  without  incumber- 
ing the  opinion  with  a  statement  of  the  various  ways  in  which  the 
question  was  raised  during  the  progress  of  the  trial.  It  is  conceded  by 
counsel  for  the  state,  as  we  understand  them,  that  if,  assuming  the 
facts  stated  to  be  true,  the  corporation  of  which  defendant  was  the 
manager  was  not  engaged  in  the  warehouse  business,  or  if  the  wheat 
was  not  received  on  storage,  within  the  meaning  of  the  statute,  the 
judgment  from  which  this  appeal  was  taken  is  erroneous,  and  should 
be  reversed. 

The  statute  in  question  (Laws  1885,  p.  61 ;  2  Hill's  Ann.  Laws  Or. 
§  4201  et  seq.)  is  entitled  "An  act  to  regulate  warehousemen,  wharfin- 
gers, commission  men  and  other  bailees,  and  to  declare  the  effect  of 
warehouse  receipts,"  and  makes  it  the  duty  of  every  person  owning  or 
operating  "any  warehouse,  commission  house,  forwarding  house,  mill, 
wharf  or  other  place  where  grain,  flour,  pork,  beef,  wool  or  other 
produce  or  commodity  is  stored,"  to  deliver  to  the  owner  thereof  a 
warehouse  receipt,  which  "shall  bear  the  date  of  its  issuance  and  shall 
state  from  whom  received,  the  number  of  sacks  if  sacked,  the  number 
of  bushels  or  pounds,  the  condition  or  quality  of  the  same  and  the 
terms  and  conditions  upon  which  it  is  stored";  prohibits  the  issuance 
of  fraudulent  receipts,  or  for  a  commodity  "not  actually  in  store  at 
the  time  of  issuing  such  receipt";  prohibits  the  bailee  from  mixing 
commodities  of  different  qualities  or  grades ;  provides  that  no  person 
operating  "any  warehouse  *  *  *  or  other  place  of  storage"  shall 
sell,  incumber,  ship,  transfer,  or  remove,  beyond  his  custody  or  control, 
any  grain  or  other  produce,  for  which  a  receipt  has  been  given  by  him, 
without  the  written  consent  of  the  holder  of  the  receipt;  makes  all 
checks  or  receipts  given  by  any  person  operating  "any  warehouse 
*     *     *     or  other  place  of  storage,"  for  any  grain  or  other  commodity 


SALE    DISTINGUISHED   FROM    OTHER   TRANSACTIONS  V 

"stored  or  deposited,"  and  all  bills  of  lading  and  transportation  receipts 
of  any  kind,  negotiable ;  provides  that  the  same  may  be  transferred  by 
indorsement,  which  shall  be  deemed  a  valid  transfer  of  the  commodity 
represented  thereby ;  that  on  the  presentation  of  the  receipt  given  by 
any  person  operating  "any  warehouse  *  *  *  or  other  place  of 
storage"  for  grain  or  other  produce,  and  payment  of  all  the  charges 
due  thereon,  the  owner  shall  be  entitled  to  the  immediate  possession  of 
the  "commodity  named  in  the  receipt" ;  that  it  shall  be  the  duty  of  the 
warehouseman  or  bailee  to  deliver  the  same  to  him;  and  the  violation 
of  any  provision  of  the  act  is  thereby  made  a  penal  offense,  punishable 
by  fine,  or  imprisonment,  or  both. 

From  this  summary,  it  is  apparent  that  the  statute,  as  its  title  and 
contents  clearly  indicate,  is  designed  to  cover  the  special  business  of 
warehousemen,  wharfingers,  commission  men,  and  other  bailees  who 
are  engaged  in  receiving  and  storing  the  goods  of  others  as  a  business. 
Its  principal  object  is  to  make  warehouse  receipts  negotiable,  and  to 
protect  the  rights  of  the  holders  thereof,  by  requiring  the  warehouse- 
man or  bailee  to  keep  constantly  on  hand  the  specific  goods  stored,  or 
a  sufficient  portion  of  the  bulk  of  which  they  become  a  part,  to  satisfy 
his  outstanding  receipts.  In  short,  it  was  designed  to  compel  a  ware- 
houseman or  other  like  bailee,  under  the  penalties  of  a  criminal  pros- 
ecution, to  live  up  to  and  abide  by  the  contract  of  bailment.  But  the 
evil  sought  to  be  remedied  by  this  legislation  and  the  remedy  sought 
to  be  applied  alike  show  that  it  never  was  within  the  legislative  mind 
that  it  should  apply  to  a  case  where  the  bailee  has  the  right,  under  the 
contract,  express  or  implied,  to  sell  or  use  the  goods  committed  to  his 
care.  In  such  case,  in  the  very  nature  of  things,  there  can  be  no  stor- 
age or  bailment ;  but  the  transaction  is,  in  essence,  a  sale  of  the  com- 
modity, and  an  extension  of  personal  credit  to  the  bailee. 

There  is  an  inherent  difference,  recognized  by  all  the  authorities, 
between  a  bailment  and  a  sale.  In  the  one  case,  the  property  remains 
in  the  depositor,  and  the  bailee  is  but  the  custodian  of  the  thing,  with 
no  right  to  use  or  dispose  of  it  in  any  way;  while,  in  the  other,  he  may 
use  it  as  his  own,  the  depositor  relying  upon  his  personal  credit  for 
its  value,  either  in  money  or  kind.  A  warehouse,  therefore,  within 
the  meaning  of  this  statute,  is  a  place  where  any  of  the  commodities 
enumerated  therein  is  received  on  storage  for  the  owner,  by  some  person 
or  corporation  engaged  in  the  general  business  of  receiving  such  go 

•ore  for  compensation  or  profit.  Bucher  v.  Com.,  103  Pa.  528; 
Fishback  v.  Van  Dusen,  33  Minn.  Ill,  22  X.  W.  244;  State  v.  Bryant, 
'.Id.  66.  Under  the  rule  in  this  state,  wheat  stored  with  a  ware- 
houseman i  e  to  1"-  a  bailment,  within  the  meaning  of  this 
act,  because  it  is,  by  the  consent  of  the  depositor,  mixed  with  other 
wheal  of  like  grade  and  quality  (McBee  v.  Ceasar,  15  (  )r.  62,  13  Pac. 
652);  hut.  when  it  is  delivered  and  received  under  an  agreement,  • 

"  implied   from  the  COU1       of  dealing,  that  the  person  to  whom 

it  is  delivered  may  use  it  as  a  part  <>f  his  consumable  stock,  and  fulfill 


10  FORMATION    OF    THE    CONTRACT 

his  obligation  to  the  owner  by  either  paying  its  market  value  when  de- 
nied or  returning  an  equal  amount  of  other  wheat  of  like  grade  and 
quality,  the  transaction  is  not  a  bailment  or  storage,  within  the  mean- 
ing of  the  statute,  and  the  depositee  cannot  be  convicted  of  a  crime  for 
doing  that  which  he  is  permitted  to  do  by  the  very  terms  of  his  con- 
tract. Lyon  v.  Lenon,  106  Ind.  567,  7  N.  E.  311;  McCabe  v.  Mc- 
Kinstry,  5  Dill.  509,  Fed.  Cas.  No.  8,667 ;  Andrews  v.  Richmond,  34 
Hun,  20;  Johnston  v.  Browne,  37  Iowa,  200;  Nelson  v.  Brown,  44 
Iowa,  455. 

Now,  as  already  suggested,  there  was  evidence  in  this  case  tending 
to  show  (1)  that  the  company  of  which  the  defendant  was  the  manager 
was  not  engaged  in  the  business  of  receiving  grain  on  storage  for  the 
owner,  and  so  was  not  a  warehouse  keeper,  within  the  meaning  of  the 
statute ;  and  (2)  that,  if  it  was  keeping  a  warehouse  for  the  storage  of 
grain,  the  Barrett  wheat  was  not  so  received.  The  case,  therefore, 
should  have  been  submitted  to  the  jury,  with  a  direction  that  they  could 
not  convict  unless  they  were  satisfied,  from  the  evidence,  that  the  place 
where  the  grain  was  deposited  was,  in  fact,  a  warehouse  for  the  storage 
of  grain,  and  that  it  was  received  there  on  storage,  and  not  on  an 
agreement,  express  or  implied,  that  the  mill  company  might  use  it  in 
the  course  of  its  business.  And,  because  these  questions  were  not  so 
submitted  to  the  jury,  the  case  must  be  reversed,  and  a  new  trial  or- 
dered. 


II.  Who  Can  Sell  2 


COMMERCIAL  BANK  OF  SELMA  v.  HURT. 

(Supreme  Court  of  Alabama,  1892.     99  Ala.  130,  12  South.  568,  19  L.  It.  A. 

701,  42  Am.  St.  Rep.  3S.) 

Action  of  detinue  by  H.  H.  Hurt  against  Phillips  &  Parish  for 
eight  bales  of  cotton,  to  which  the  Commercial  Bank  of  Selma  in- 
terposed claim.  There  was  judgment  for  the  plaintiff,  and  claimant 
appeals. 

Walker,  J.3  The  claim  of  the  appellant,  the  Commercial  Bank 
of  Selma,  to  the  cotton  involved  in  this  suit  rests  upon  a  transfer 
and  delivery  by  the  H.  C.  Keeble  Company  of  warehouse  receipts 
therefor  as  collateral  .security  for  a  note  made  by  that  company  to 
the  bank.  The  H.  C.  Keeble  Company  was  a  corporation  engaged 
in  business  as  a  cotton  factor  and  grocery  merchant  in  the  city  of 
Selma.  The  appellee,  who  was  the  owner  of  the  cotton,  had  had  it 
shipped  to  that  company,  with  instructions  not  to  sell  it  until   or- 

2  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  11. 

3  The  statement  of  facts  is  abridged  and  part  of  the  opinion  is  omitted. 


WHO    CAN    SELL  11 

tiered  to  do  so.  The  consignee  had  the  cotton  stored  in  the  ware- 
house of  Phillips  &  Parish,  and  took  the  warehouse  receipts  there- 
for in  its  own  name.  No  advances  were  made  to  the  appellee  on 
this  cotton,  and  there  is  no  evidence  that  he  authorized  the  consignee 
to  store  it  and  take  the  warehouse  receipts  in  its  own  name,  or  to 
pledge  the  cotton  itself,  or  the  warehouse  receipts.  Under  the  com- 
mon law,  a  factor  or  commission  merchant  has  no  implied  authority 
to  pledge  the  goods  of  his  principal  for  his  own  use.  Unless  the  re- 
sult is  controlled  by  some  statute,  the  attempted  pledge  does  not 
work  a  divestiture  of  the  title  of  the  principal,  and  the  party  receiv- 
ing such  a  pledge  and  advancing  his  money  acquires  no  right  to  the 
property  as  against  the  principal,  whether  he  knew  he  was  dealing 
with  a  factor  or  not.  Bott  v.  McCoy,  20  Ala.  578,  56  Am.  Dec.  223 ; 
Voss  v.  Robertson,  46  Ala.  483;  Allen  v.  Bank,  120  U.  S.  20,  7  Sup. 
Ct.  460,  30  L.  Ed.  573 ;  1  Lawson,  Rights,  Rem.  &  Pr.  §  229.    *    *    * 

If  the  H.  C.  Keeble  Company,  instead  of  having  the  cotton  stored 
in  the  warehouse  of  Phillips  &  Parish,  had  retained  possession  of  it 
until,  without  any  authority  or  license  from  the  appellee,  the  cotton 
itself  was  delivered  to  the  bank  in  pledge  to  secure  the  payment  of 
the  note  of  the  H.  C.  Keeble  Company,  it  is  plain  that  the  bank 
would  not  have  acquired  any  greater  title  to  the  property  than  that 
company  had  to  confer,  and  the  appellee  would  have  been  entitled 
to  recover  the  cotton  from  the  bank,  or  to  hold  the  bank  liable  for 
its  conversion.  But  it  is  claimed  that  the  factor,  having  stored  the 
cotton  in  a  warehouse,  and  obtained  warehouse  receipts  therefor  to 
itself,  was  enabled,  by  the  transfer  of  those  receipts,  to  confer  upon 
the  bank  a  claim  to  the  cotton  which  must  prevail  against  the  title 
of  the  true  owner.  Section  1178  of  the  Code  is  relied  upon  as  giving 
this  effect  to  the  transfer  of  warehouse  receipts  by  the  persons  to 
whom  the}-  are  issued.  The  clause  of  that  section  upon  which  this 
claim  is  ba  ed  is  in  the  following  words:  "The  receipt  of  a  ware- 
houseman, on  which  the  words  'Not  negotiable'  arc  not  plainly  wril 
ten  or  stamped,  may  be  transferred  by  the  indorsement  thereof,  and 
any  person  to  whom  the  same  is  transferred  must  be  deemed  : 
taken  to  be  the  owner  of  the  things  or  property  therein  sp<  cified, 
so  far  as  to  give  validity  to  any  pledge,  lien,  or  transfer  made  or 
created  by  such  person." 

ons  1175,  1177-1179,  of  the  Code,  arc  based  upon  an  act  ap 
proved   Februar    28,  1881,  entitled  "An  act  to  prevent  the  issue  of 
ipts,  and  to  punish  the  fraudulent  transfer  of  property  bv 
warehousemen,    wharfiii  and    others."     Acts    Ala.    1880-81,    p. 

In   the  proa       of  codification  the   provisions  of  thai    stal 

re  redrafted,  and  .  hat   modified.     But  the  provisions  of  the 

four  ins  above  mentioned  are  all   in   furtherance  of  the  main 

e  purpose,  which  was  indicated  in  the  title  and  in  the  cor 

ponding  sections  of  th<  inal  act.     So   far  as  v  ise   re 

•  tied,  the  pur]  I   i     tatute  is,  in  the  first  place, 


12  FORMATION    OF    TUE    CONTRACT 

to  prevent  the  issue  of  such  receipts,  unless  the  property  therein 
described  has  been  actually  received,  and  is  in  the  possession  of  the 
person  issuing  the  receipt.  This  purpose  is  manifested  in  section 
1175  of  the  Code.  The  purpose,  in  the  next  place,  is  to  give  defi- 
nite legal  recognition  to  such  receipts  as  true  tokens  of  the  posses- 
sion of  the  property  described  in  them ;  and  to  regulate  the  manner 
in  which  the  holder  of  .such  a  token  of  possession  may,  by  an  as- 
signment of  it,  convey  his  interest  in  the  property  described  as  ef- 
fectually as  he  could  by  a  transfer  and  delivery  of  the  property  it- 
self. The  provisions  to  this  end  are  embodied  in  sections  1177- 
1179. 

Undoubtedly  it  was  the  intention  of  the  legislature  to  facilitate  and 
throw  safeguards  around  dealings  in  personal  property  by  the  use 
of  paper  representative  of  it.  To  this  end  the  holder  of  a  warehouse 
receipt  is  so  far  treated  as  the  possessor  of  the  property  mentioned 
in  it  that  his  transfer  of  the  receipt,  in  the  mode  prescribed  by  the 
statute,  operates  in  the  same  manner  as  the  direct  delivery  of  the 
property  itself  would  do.  The  transfer  of  the  receipt  is  given  ef- 
fect as  a  symbolical  delivery  of  possession.  The  statute  does  not 
undertake  to  make  the  receipt  better  evidence  of  title  than  the  actual 
possession  of  the  property  itself.  We  cannot  conceive  that  it  could 
have  been  within  the  contemplation  of  the  legislature  that  the  pro- 
visions of  the  statute  would  enable  a  thief,  by  depositing  the  stolen 
property  with  a  warehouseman,  and  obtaining  a  receipt  for  it  in  due 
form,  to  confer  upon  an  innocent  purchaser  for  value  and  in  good 
faith  a  claim  to  the  property  which  would  prevail  against  that  of  the 
true  owner. 

In  Collins  v.  Ralli,  20  Hun,  246,  it  was  held  that  a  New  York- 
statute  substantially  identical  with  the  provision  above  quoted  did 
not  protect  the  purchasers  for  value  and  in  good  faith  of  warehouse 
receipts,  when  the  possession  of  the  cotton  they  represented  by  the 
person  to  whom  they  were  issued  had  been  larcenous.  After  quot- 
ing the  statute,  the  court  said :  "The  learned  counsel  for  the  de- 
fendants insist  that  the  provisions  of  this  section  afford  them  com- 
plete protection  against  a  recovery  in  this  action;  that,  having 
purchased  the  cotton  upon  the  faith  of  the  negotiable  warehouse  re- 
ceipts, and  paid  therefor  full  market  value,  this  case  falls  within  the 
spirit  and  the  letter  of  the  section.  All  the  other  sections  of  this 
act,  except  the  last,  which  is  unimportant,  prohibit  the  issue  of  false 
receipts,  etc.,  and  prescribe  the  penalty  for  a  violation  of  their  pro- 
visions. The  scope  and  object  of  the  act,  therefore,  seems  to  be  to 
protect  the  mercantile  community  against  fraudulent  practices  by 
warehousemen,  wharfingers,  and  others,  in  respect  to  these  receipts 
for  goods  stored  or  represented  to  be  stored  with  them.  That  this 
is  the  purpose  is  shown  by  the  title  of  the  act.  *  *  *  The  clause 
'warehouse  receipts  given  for  any  goods  *  *  *  stored  or  de- 
posited with  any  warehouseman'  means  receipts  given  for  goods  so 


WHO    CAN    SELL  13 

stored  or  deposited  by  any  person  having  the  title  thereto,  real  or 
apparent,  or  authority  of  such  person  therefor.  This  section  of  the 
act  proceeds  upon  the  assumption  that  the  receipt  is  so  issued.  Any 
other  construction  would  enable  warehousemen  to  issue  receipts  for 
goods,  known  by  them  to  be  stolen,  and  so  convey  title  to  them,  or 
even  themselves  to  commit  larceny,  and,  by  issuing  receipts  for 
the  stolen  property,  defraud  the  plundered  owner  of  all  title  to  and 
power  of  reclaiming  it.  Such  a  construction  would  work  a  change 
in  the  law  hardly  contemplated  by  the  legislature  when  the  act  un- 
der consideration  was  passed,  and  yet  the  construction  insisted  upon 
by  the  defendants  would  accomplish  precisely  this  result.  Courts 
often  have  to  look  bevond  the  mere  words  of  a  statute  in  determin- 
ing  its  meaning,  and  give  to  it  such  an  interpretation  as  the  mischief 
sought  to  be  cured  and  the  evident  intention  of  the  legislature  indi- 
cate." The  judgment  in  that  case  was  affirmed  by  the  court  of  ap- 
peals, (Collins  v.  Ralli,  85  N.  Y.  637,)  and  the  decision  has  been 
approved  in  subsequent  cases,  (Hentz  v.  Miller,  94  X.  Y.  64;  Soltau 
v.  Gerdau,  119  X.  Y.  380,  23  X.  E.  864,  16  Am.  St.  Rep.  843). 

To  put  it  in  the  power  of  a  factor  to  give  effect  to  an  unauthor- 
ized pledge  of  the  property  of  his  principal  by  resorting  to  the  de- 
vice of  pledging  a  receipt  for  the  property  instead  of  the  property 
itself,  would  as  clearly  be  an  abridgment  of  the  common-law  rights 
of  the  owner  as  it  would  be  to  allow  a  thief,  by  using  a  receipt  for  the 
stolen  property  instead  of  the  property  itself  to  defeat  the  common- 
law  right  of  the  owner  to  reclaim  the  stolen  property  in  whosesoever 
hands  it  may  be  found.  The  statute  under  consideration  does  not 
purport  to  deal  with  the  right  of  the  owner  of  personal  property  to 
recover  it  from  the  one  who  claims  under  a  disposition  of  it  which 
was  unauthorized  by  the  owner.  The  object  in  view  being  to  recog- 
nize dealings  in  personal  property  by  the  use  of  certain  tokens  of 
its  possession,  to  prevent  the  issue  of  such  tokens  except  when  the 
property  mentioned  in  them  has  actually  been  received  by  t  he  per- 
s  issuing  them,  and  to  regulate  the  transfer  of  the  property  by 
assignment  of  the  token,  as  a  substitute  for  actual  delivery  of  the 
property.  The  statute  was  framed  on  the  assumption  that  the  pos- 
session of  the  property  by  the  person  to  whom  the  token  was  issued 
was  accompanied  by  ownership  and  a  right  to  dispose  of  it,  and 
questions  presented  by  the  assertion  of  a  paramount  claim  to  the 
property  were  not  dealt  with  by  the  statute,  but  were  left  to  be  de 
termined  by  existing  laws  governing  the  right  of  tin-  true  owner  of 
property    to   follow   and   reclaim    it    in    the   hands  of   persons   claiming 

under  an  unauthorized  disposition  *>\  it  by  one  nut  the  true  owner, 
but  in  actual  posse   sion  of  it. 

There  is  evidence  in  section  1178  of  the  Code  of  the  absence  <>f  any 

intention  to  enable  the  holder  of  a  warehouse  receipt,  by  ;i  tran 
of  it  by  indorsement,  to  confer  any  better  claim  to  the  property  than 


11  FORMATION    OF    THE    CONTRACT 

he  could  if  he  had  not  stored  the  property  with  a  warehouseman, 
but  had  invested  the  person  with  whom  he  dealt  with  actual  posses- 
sion of  it.  Immediately  after  the  clause  already  quoted  from  that 
section  is  the  following  provision:  "But  this  section  must  not  be 
so  construed  as  to  affect  or  impair  the  lien  of  a  landlord  on  such 
things  or  property  for  rent  or  advances,  or  to  affect  or  impair  any 
lien  thereon  created  by  contract,  of  which  notice  is  given  by  registra- 
tion in  the  manner  prescribed  by  law."  It  is  not  to  be  supposed  that 
the  legislature  was  more  solicitous  to  protect  the  rights  of  lienhold- 
ers  than  those  of  the  owners  of  the  property.  The  assumption  is 
that  it  is  the  owner  who  has  had  the  property  stored  and  obtained 
a  warehouse  receipt  for  it,  and  the  provision  just  quoted  simply 
makes  it  plain  that  he  cannot,  by  a  transfer  of  the  receipt,  any  more 
than  he  could  by  a  disposition  of  the  property  accompanied  by  an  ac- 
tual delivery  of  possession,  affect  or  impair  liens  upon  it. 

It  is  further  provided  in  the  same  section  that,  "in  the  event  of  the 
loss  or  destruction  of  such  receipt,  the  warehouseman,  not  having 
notice  of  the  transfer  thereof  by  indorsement,  may  make  delivery  of 
the  things  or  property  to  the  rightful  owner  thereof ;  and  if  the 
things  or  property,  or  any  part  thereof,  be  claimed  or  taken  from 
the  custody  or  possession  of  the  warehouseman  under  legal  process, 
the  surrender  thereof  may  be  made  without  delivery  or  cancellation 
of  such  receipt,  or  without  indorsement  thereon."  The  first  of  these 
two  clauses  shows  that  it  was  assumed  that  the  receipt  was  issued  to 
the  rightful  owner  of  the  property.  The  second  of  them  shows  that 
it  was  no  part  of  the  legislative  intention  to  make  the  fact  that  his 
receipt  is  outstanding  a  protection  to  the  warehouseman  against 
paramount  claims  to  the  property,  or  to  displace,  in  the  case  of  the 
issue  of  a  warehouse  receipt  to  another,  the  common-law  rules  gov- 
erning the  rights  of  the  owner  to  recover  his  property  from  a  stran- 
ger claiming  under  a  disposition  of  it  not  binding  on  him. 

The  apparent  object  of  the  statutory  provisions  in  reference  to 
warehouse  receipts  is  to  give  them,  for  purposes  of  commerce,  recog- 
nition and  credit  as  substitutes  for  the  property  described  in  them, 
and  to  give  dealings  in  them  the  same  effect  as  similar  dealings  with 
the  property  itself.  We  think  that  they  are  made  negotiable  only 
in  the  sense  that  in  their  passage  through  the  channels  of  commerce 
the  law  regards  the  property  which  they  describe  as  following  them, 
and  gives  to  their  regular  transfer  by  indorsement  the  effect  of  a 
manual  delivery  of  the  things  specified  in  them.  No  intention  is 
disclosed  to  give  dealings  in  them  any  more  controlling  effect  upon 
the  title  to  the  property  they  represent  than  would  be  given  to  similar 
dealings  with  the  property  itself.  At  last  they  are  mere  tokens  of 
possession,  and  no  guaranties  of  title  by  the  persons  issuing  them. 
The  warehouseman  holds  himself  out  as  the  custodian  for  the  legal 
holder  of  the  receipt  of  the  property  mentioned  in  it,  but  he  does  not 


WHO    CAN   SELL  15 

warrant  the  title  of  the  property  against  the  claims  of  strangers  to 
the  contract  of  storage.     *     *     * 

In  Shaw  v.  Railroad  Co.,  101  U.  S.  557,  25  L.  Ed.  892,  it  was 
recognized  that  a  statute  declaring  that  bills  of  lading  "shall  be  ne- 
gotiable by  written  indorsement  thereon  and  delivery,  in  the  same 
manner  as  bills  of  exchange  and  promissory  notes,"  should  not,  in 
the  absence  of  language  clearly  evidencing  such  an  intention,  be  con- 
strued as  effecting  such  an  innovation  upon  the  common-law  right 
of  the  owner  of  property  to  protection  against  its  misappropriation 
by  others  that  such  misappropriation  could  be  successfully  made  by 
the  use  of  a  symbol  or  representative  of  the  property,  when  it  would 
not  prevail  against  the  claim  of  the  owner  if  the  possession  of  the 
property  itself  had  been  acquired  in  a  similar  manner.  In  National 
Bank  o'f  Commerce  v.  Chicago,  B.  &  N.  R.  Co.,  44  Minn.  224,  46 
X.  W.  342,  560,  9  L.  R.  A.  263,  20  Am.  St.  Rep.  566,  the  proposition 
was  stated  and  applied  that  it  is  always  a  good  defense  to  a  carrier, 
even  against  an  innocent  indorsee  of  the  bill  of  lading,  that  the 
property  was  taken  from  its  possession  by  one  having  a  paramount 
title ;  and  it  was  decided  that  the  correctness  of  this  proposition  was 
not  affected  by  a  statute  which  provided  that  bills  of  lading  or  re- 
ceipts for  any  goods,  wares,  merchandise,  etc.,  when  in  transit  by 
cars  or  vessels,  "shall  be  negotiable,  and  may  be  transferred  by  in- 
dorsement and  delivery  of  such  receipt  or  bill  of  lading,  and  any 
person  to  whom  the  said  receipt  or  bill  of  lading  may  be  transferred 
shall  be  deemed  and  taken  to  be  the  owner  of  the  goods,  wares,  or 
merchandise  therein  specified."     *     *     * 

Our  conclusion  is  that  it  would  be  a  perversion  of  the  manifest 
purpose  of  the  statute  to  construe  it  as  having  the  effect  of  putting 
the  symbol  of  the  property  upon  a  higher  plane,  as  an  evidence  of 
title,   than   the  actual  possession  of  the  property  it  describes.     The 

tute  does  not  undertake  to  make  the  transfer  and  delivery  of  the 
symbol  more  than  the  equivalent  of  an  actual  transfer  and  delivery 
of  the  pn  iperty  itself. 

■  needing  that  the  clause  in  the  contract  of  pledge,  "which  cotton 
has  been  advanced  upon  by  us  to  its  full  value,"  dues  not  show  that 
the  ]  I<  dj  or'  character  as  a  factor  was  recognized  in  the  transaction, 
and  that  it  was  the  intention  of  the  parties  to  limit  the  operation  of 

■  to  the  pledgor's  actual  interest  in  the  cotton  by  rea 
of  advance-,  made  upon  it,  we  have,  then,  the  simple  case  of  a  pl< 

•  r  of  the  property  of  his  principal  for  his  own  use.  The 
warehouse   receipts   which    he   obtained   are  to  be   regarded   i 

elf  which  he  held  in  the  capacity  of  an  agenl  to  sell.  We 
have  no  "factoi  '  a  t"  to  raise  up  a  statutory  estoppel  againsl  the 
owner,  based  upon  his  acl  in  intrusting  the  factor  with  posses  ion  of 
the  goods,  or  documentary  evidence  of  ownership  and  right  of  • 

d,  and  thereby  leading  innocent  third  persons  to  deal  with  the 
factor  on  the  faith  of  hi'    apparenl  ownership.     There  is  nothing  to 


16  FORMATION    OF    THE    CONTRACT 

take  this  case  out  of  the  influence  of  the  common-law  rule,  which  pro- 
tects the  owner  of  personal  property  against  an  unauthorized  pledge 
of  it  by  one  who  held  it  merely  as  factor  or  as  agent  to  sell. 

The  original  defendants,  the  warehousemen,  having  disclaimed 
all  interest  in  the  suit,  the  plaintiff  was  entitled  to  recover  his  cotton, 
and  the  claim  of  the  bank,  based  upon  the  attempted  pledge  by  the  H. 
C.  Keeble  Company,  presented  no  legal  obstacle  to  the  plaintiff's 
recovery.     *     *     *     Affirmed. 


GUINZBURG  v.  H.  W.  DOWNS  CO. 

(Supreme  Judicial  Court  of  Massachusetts,  1S96.    165  Mass.  467,  43  N.  E.  195, 

52  Am.  St.  Rep.  525.) 

Bill  by  William  Guinzburg  against  the  H.  W.  Downs  Company  to 
establish  plaintiff's  ownership  of  shares  in  defendant  corporation,  and 
to  enforce  his  rights  as  stockholder.  Reserved  for  the  consideration  of 
the  supreme  judicial  court. 

Allen,  J.  A  pledgee,  on  default  in  the  payment  of  his  debt,  may 
sell  the  pledged  property  at  public  auction,  giving  to  the  pledgor  no- 
tice of  the  time  and  place  of  sale.  Washburn  v.  Pond,  2  Allen,  474; 
Union  Cattle  Co.  v.  International  Trust  Co.,  149  Mass.  492,  501,  21  N. 
E.  962.  But  in  making  such  sale  he  is  bound  to  exercise  reasonable 
skill  and  diligence  in  order  to  get  the  value  of  the  property.  Newsome 
v.  Davis,  133  Mass.  343;  Clark  v.  Simmons,  150  Mass.  357,  23  N.  E. 
108.  This  includes  the  fixing  of  a  reasonable  time  and  place  of  sale. 
Markham  v.  Jaudon,  41  N.  Y.  235,  243. 

The  facts  reported  in  the  present  case  are  somewhat  meager.  For 
instance,  we  do  not  know  what  public  notice  was  given  of  the  sale,  nor 
whether  the  price  obtained  was  much,  if  any,  below  the  value  of  the 
shares.  We  are  much  inclined  to  think  the  place  of  sale  was  an  un- 
reasonable one.  The  pledged  property  consisted  of  over  one-third  of 
the  whole  number  of  shares  in  a  small  Massachusetts  corporation, 
whose  whole  capital  stock  was  only  $16,000.  None  of  the  stock  had 
ever  been  sold  at  auction  in  New  York,  and  it  was  not  listed.  It  did 
not  appear  that  it  was  known  in  New  York.  The  note  for  which  the 
stock  was  pledged  was  made  and  delivered  in  Massachusetts,  and  was 
payable  here,  and  the  pledge  was  made  here.  The  pledgee  was  a  New 
York  corporation.  Under  these  circumstances,  it  would  have  been 
better  to  make  the  sale  in  Massachusetts.  But  it  appears  that  the 
Downs  Company,  which  was  the  pledgor,  and  its  officers,  whose  names 
were  also  on  the  note,  all  received  notice  of  the  proposed  sale  on  July 
20,  1894,  and  the  sale  was  fixed  for  July  24th;  and  the  pledgor  and 
its  officers,  after  the  receipt  of  the  notice,  did  not  communicate  with 
the  pledgee,  or  take  any  action  in  regard  to  the  said  notice  or  the  pro- 
posed sale.  Since  all  the  parties  whose  names  were  on  the  note  had 
notice  for  this  length  of  time,  and  omitted  to  make  any  protest  or  ob- 


WHO    CAN    SELL  17 

jection  to  the  place  or  time  of  sale,  and  took  no  action  whatever  in  re- 
gard to  the  notice  or  proposed  sale,  we  think  this  omission  and  silence 
amounted  to  a  waiver  of  objection  on  this  score,  and  that  they  cannot 
now  be  heard  to  complain  that  the  place  was  unreasonable.  See  Met- 
calf  v.  Williams,  144  Mass.  452,  455,  11  N.  E.  700.  The  fact  that  there 
was  only  one  bidder  does  not  render  the  sale  invalid.  Learned  v.  Geer, 
139  Mass.  31,  29  X.  E.  215. 

On  the  facts  reported,  the  sale  was  valid,  and  the  plaintiff  is  entitled 
to  a  decree  in  his  favor.    Decree  for  the  plaintiff. 


SCOLLANS  v.  ROLLINS. 

(Supreme  Judicial  Court  of  Massachusetts,  1S99.    173  Mass.  275,  53  N.  E.  SG3, 

73  Am.  St.  Rep.  2S4.) 

Actions  by  T.  J.  Scollans  against  E.  H.  Rollins  &  Sons.  There  were 
judgments  for  defendants,  and  plaintiff  excepts. 

Barker,  J.  The  documents  for  the  conversion  of  which  these  ac- 
tions are  brought  are  described  in  the  bill  of  exceptions  and  in  the 
several  declarations  as  bonds  of  the  city  of  Boston.  Upon  inspection 
of  the  copy  which  is  part  of  the  bill,  although  the  documents  bear  upon 
their  faces  the  words  "Registered  Bond,"  they  do  not  appear  to  have 
been  under  seal.  Each  document  certifies  that  there  will  be  due  from 
the  city,  payable  at  the  office  of  the  city  treasurer  on  the  1st  day  of 
April.  1913,  to  William  Scollans,  the  sum  of  $1,000,  with  interest  at  4 
per  cent,  per  annum,  payable  on  the  1st  day  of  April  and  October  in 
each  year.  Each  also  bears  upon  its  face  a  statement  that  it  is  trans- 
ferable only  at  the  office  of  the  city  treasurer.  From  this  it  results 
that,  whether  technically  bonds  or  promissory  notes,  the  documents 
were  not  negotiable  paper,  and  could  not  be  made  negotiable  by  any  act 
or  indorsement  of  William  Scollans,  the  payee.  When,  intending  to 
part  with  the  property  in  the  documents  and  in  the  rights  of  which 
they  were  the  evidence,  William  Scollans  delivered  them  to  the  plain- 
tiff in  payment  of  a  debt,  the  property  in  the  documents  and  in  the 
rights  passed  to  the  plaintiff.  When  so  delivered  to  the  plaintiff,  each 
document  bore  upon  its  reverse  side  a  stamped  writing,  signed  by  Wil- 
liam Scollans,  and  acknowledged  by  him  before  a  justice  of  the  peace 
to  be  his  free  act  and  deed.  This  stamped  writing  was  of  the  follow- 
ing tenor:  "Value  received,  I  assign  *  *  *  tbe  within  certificate 
of  the  city  of  Boston  stock,  and  hereby  authorize  the  transfer  thereof 
on  the  books  of  the  city  treasury."  These  Indorsements  neither  made 
purported  to  make  the  documenl  itiable  securities  within  the 

meaning  of  the  law  merchant.  The  documents  remained  in  the  same 
condition  when  they  w<  r<  ti,  or  feloniou  ly  embezzled,  by  a  person 

who   delivered   them    in  the   same  condition    to  a  hank'   as  pledgee,   and 

when  they  were  sold  at  auction  by  that  hank  to  the  defendants,  who 

(Juki  i.  ,  '     .  -12 


IS  FORMATION    OF    THE    CONTRACT 

thereupon  filled  in  with  their  firm  name  the  blank  in  each  indorse- 
ment, and  presented  the  documents  to  the  city  officials  for  cancellation, 
and  received  in  return  new  certificates  payable  to  themselves. 

Under  our  decisions  the  property  of  the  real  owner  of  documents  of 
the  nature  of  those  now  in  question  is  not  devested  by  a  sale  to  a  pur- 
chaser in  good  faith  and  for  value  from  one  who  has  got  them  feloni- 
ously from  the  true  owner,  nor  by  any  subsequent  dealing  of  such  a 
purchaser  with  the  documents,  but  the  property  remains  with  the  true 
owner,  from  whom  they  were  feloniously  taken.  The  real  ownership 
in  such  documents  follows  the  general  rule  as  to  the  ownership  of 
chattels,  the  only  exception  to  which  is  as  to  property  which  consists 
of  the  currency  of  the  country,  or  securities  which,  by  the  law  mer- 
chant, are  negotiable.  OTIerron  v.  Gray,  168  Mass.  573,  575,  47  N. 
E.  429,  40  L.  R.  A.  498,  60  Am.  St.  Rep.  411.  See,  also,  Dame  v. 
Baldwin,  8  Mass.  518;  Jarvis  v.  Rogers,  13  Mass.  105;  Id.,  15  Mass. 
389;  Mason  v.  Waite,  17  Mass.  560;  Wheeler  v.  Guild,  20  Pick. 
545,  32  Am.  Dec.  231 ;  Stanley  v.  Gaylord,  1  Cush.  536,  48  Am.  Dec. 
643 ;  Worcester  County  Bank  v.  Dorchester  &  Milton  Bank,  10  Cush. 
488,  57  Am.  Dec.  120;  Riley  v.  Power  Co.,  11  Cush.  11;  Wyer  v. 
Bank,  11  Cush.  51,  59  Am.  Dec.  137;  Chapman  v.  Cole,  12  Gray, 
141,  71  Am.  Dec.  739;  Gilmore  v.  Newton,  9  Allen,  171,  85  Am. 
Dec.  749;  Heckle  v.  Lurvey,  101  Mass.  344,  3  Am.  Rep.  366;  Spooner 
v.  Holmes,  102  Mass.  503,  3  Am.  Rep.  491;  Hinckley  v.  Railroad 
Co.,  129  Mass.  52,  37  Am.  Rep.  297;  McCann  v.  Randall,  147  Mass. 
81,  94,  17  N.  E.  75,  9  Am.  St.  Rep.  666;  Bank  v.  Simmons,  App. 
Cas.  (1892)  201,  215;  Bank  v.  Cady,  15  App.  Cas.  267;  Earl  of  Shef- 
field v.  Bank,  13  App.  Cas.  333 ;  London  &  County  Banking  Co.  v. 
London  &  River  Plate  Bank,  20  Q.  B.  Div.  232 ;  Cole  v.  Bank,  L.  R. 
10  C.  P.  354;  Crouch  v.  Credit  Foncier  of  England,  8  Q.  B.  374; 
Shaw  v.  Railroad  Co.,  101  U.  S.  557,  25  L.  Ed.  892;  Knox  v.  Eden 
Musee  Americain  Co.,  148  N.  Y.  441,  42  N.  E.  98S,  31  L.  R.  A.  779, 
51  Am.  St.  Rep.  700;  Barstow  v.  Mining  Co.,  64  Cal.  388,  1  Pac. 
349,  49  Am.  Rep.  705 ;   Power  Co.  v.  Robinson  (C.  C.)  52  Fed.  520. 

As  the  plaintiff  is  yet  the  true  owner  of  the  documents  which  the 
defendants  have  surrendered  for  cancellation,  and  for  which  they  have 
in  return  received  new  certificates,  payable  to  themselves,  the  defend- 
ants cannot  sustain  the  verdicts  which  were  ordered  in  their  favor, 
except  by  showing  that  the  evidence  offered  would,  as  matter  of  law, 
show  that  the  plaintiff  is  estopped  from  setting  up  his  true  ownership 
as  against  them.  Such  an  estoppel  must  bear  looking  at  from  two 
sides.  The  indorsements  upon  the  documents,  when  the  defendants 
took  them,  contained  a  blank  the  presence  of  which  made  it  uncertain 
whether  the  payee  had  parted  with  his  title.  The  presence  of  the 
blanks  informed  the  defendants  that  the  instruments  passed  to  them 
must  be  other  than  they  were  to  give  the  defendants  a  right  to  sur- 
render them  for  cancellation,  and  to  receive  new  certificates  in  ex- 
change.    Such  blank  transfers  are  consistent  with  the  continued  own- 


WnO    CAST   SELL 


19 


ership  of  the  person  who  has  executed  them,  and  are  also  consistent 
with  the  ownership  of  some  other  person  than  the  hearer;  and  where 
they  do  not  purport,  in  terms,  to  confer  ownership  upon  the  bearer, 
the  most  which  can  be  predicated  of  them,  in  the  absence  of  evidence 
of  custom  or  usage,  is  that  they  are  made  in  aid  of  the  true  title,  and 
not  to  defeat  it,  and  that  they  are  to  be  used  only  to  help  the  true 
owner  in  procuring  for  himself  the  right  of  registration  and  the  other 
rights  of  which  the  documents  so  indorsed  are  the  evidence.  See 
France  v.  Clark.  26  Ch.  Div.  257.  There  was  no  evidence  in  the  pres- 
ent case  that  such  certificates  with  blank  assignments  pass  in  fact  from 
hand  to  hand,  like  negotiable  instruments,  without  inquiry  as  to  the 
right  of  the  bearer  to  dispose  of  them.  Without  such  evidence  we 
cannot  assume  that  these  documents  were  "in  order,"  so  as  to  make 
the  act  of  taking  them  without  inquiry  as  to  how  the  title,  originally  in 
the  payee,  had  come  down  to  the  bank  of  which  the  defendants  bought 
"the  act  of  a  reasonable  man  reasonably  dealing  with  matters  of  busi- 
ness." See  Williams  v.  Bank,  38  Ch.'  Div.  400,  and  Bank  v.  Cady, 
15  App.  Cas.  267,  270.  Unless  it  is  the  custom  to  regard  such  docu- 
ments so  indorsed  as  equivalent  to  securities  to  bearer,  the  blanks 
should  have  put  the  defendants  upon  inquiry,  and  they  would  not  be  in 
a  position  to  contend  that  the  true  owner  is  estopped  from  asserting 
his  title. 

Again,  examining  this  contention  of  title  by  estoppel  in  the  light  of 
the  plaintiff's  own  conduct,  we  are  of  opinion  that  it  cannot  be  said, 
as  matter  of  law,  upon  the  evidence,  that  his  conduct  has  been  such  as 
to  prevent  him  from  asserting  his  title  against  any  one.  The  plaintiff 
has  neither  himself  made,  nor  knowingly  allowed  to  be  made,  any 
representation  that  the  bearer  of  these  documents  with  their  assign- 
ments could  transfer  the  property  in  them.  If  the  possession  of  the 
certificates  by  the  bank  with  the  blank  assignments  indorsed  enable  1 
the  bank  of  which  the  defendants  bought  to  make  in  substance  such  a 
representation  to  the  defendants,  the  giving  of  that  possession  was  not 
the  act  of  the  plaintiff,  and  was  possible  only  because  of  the  commis- 
;  of  a  felony  against  him,  of  which  he  was  not  cognizant,  and  for 
which  he  was  not  re  ble. 

The  only  other  possible  ground  for  an  estoppel  is  negligence.    While 

the  plaintiff  intrusted  these  documents  to  persons  whose  business  it 

bankers  and  brokers,  to  sell  securities,  lie  did  not  intrust  them 

to  the  dep  for  sale  or  to  pledge,  hut  simply  for  safe-keeping; 

and  he  had  good  rea  on  to  suppose  thai   the  documents  remained   in  a 
afe,  in  an  envelope  marked  with  his  own  name,  and  sealed.     The  fact 

that  the  custodians  of  hi-  securities  were  bankers  and  broki  r  .  he  no; 
intrusting  the  »ecuriti<     !■•  them  in  that  capacity,  did  not  make  him 
ible  for  an  unauthorized  sale,  possible  only  through  the  com 
mission  of  a  felon}-.    See  Cole  v.  Bank,  L.  R.  10  C.  I'.  369;   Wood  v. 
Rowcliffe,  6  Hare,  183;  Urnb  v.  Attenborough,  1  Besl  &  S.  831  ;   He} 
man  v.  Flewker,  13  C.  B,  'X.  S.)  51'';    [enkyns  v.  Usborne,  7  Man.  & 


20  FORMATION    OF    THE    CONTRACT 

G.  678;  McEwan  v.  Smith,  2  H.  L.  Cas.  309;  Kingsford  v.  Merry,  1 
Hurl.  &  N.  503;  Hardman  v.  Booth,  1  Hurl.  &  C.  803.  If,  therefore, 
he  was  negligent,  either  in  intrusting  the  certificate  to  his  depositaries 
for  safe-keeping,  or  in  not  withdrawing  them  when  he  found  that  he 
had  been  credited  with  the  certificates  in  account,  and  was  falsely 
informed  that  they  were  still  in  the  safe,  or  in  continuing  to  trust  to 
the  honesty  and  integrity  of  his  depositary,  that  negligence  would  seem 
not  to  have  entered  into  the  transaction  by  which  the  defendants 
bought  and  paid  for  the  certificates,  and  not  to  have  been  a  proximate 
cause  of  their  purchase.  See  O'Herron  v.  Gray,  168  Mass.  573,  577, 
47  N.  E.  429,  40  L.  R.  A.  498,  60  Am.  St.  Rep.  411,  and  cases  cited. 
See,  also,  Bank  v.  Stowell,  123  Mass.  196,  25  Am.  Rep.  67 ;  White  v. 
Duggan,  140  Mass.  18,  20;  Lumber  Co.  v.  Eldridge,  171  Mass.  516, 
51  N.  E.  9,  14,  41  L.  R.  A.  617,  68  Am.  St.  Rep.  446. 

However  this  may  be,  we  are  of  opinion  that  it  cannot  be  held  as 
matter  of  law  that  the  plaintiff,  upon  the  evidence  offered,  was  guilty 
of  negligence.  He  had  at  least  the  right  to  have  that  question  passed 
upon  by  a  jury.    Exceptions  sustained. 


O'CONNOR'S  ADM'X  v.  CLARK. 

(Supreme  Court  of  Pennsylvania,  1S95.     170  Pa.  318,  32  Atl.  1029,  29  L.  E. 

A.  607.) 

Replevin  by  John  O'Connor's  administratrix  against  John  Clark. 
Judgment  for  plaintiff,  and  defendant  appeals. 

Sterrett,  C.  J.  If  there  is  nothing  more  in  this  case  than  the 
facts  recited  by  the  learned  trial  judge  in  the  excerpt  from  his  charge 
quoted  in  the  first  specification  of  error,  the  instructions  therein  given 
to  the  jury  to  find  for  the  plaintiff  if  they  believed  the  testimony 
would  be  substantially  correct.  The  only  facts  of  which  this  instruc- 
tion is  predicated  are  (1)  that  the  wagon  in  question  was  the  proper- 
ty of  John  O'Connor,  the  original  plaintiff;  and  (2)  that  Tracy,  with- 
out his  permission,  took  it,  and  sold  it,  or  attempted  to  sell  it,  to  the 
defendant  as  his  own.  But  these  are  not  the  only  facts  of  which 
there  was  evidence  before  the  jury. 

On  defendant's  behalf,  it  is  contended  that  the  testimony  tended 
to  prove,  and  the  jury,  if  they  had  been  permitted,  would  have  been 
warranted  in  finding,  that  defendant  purchased  the  property  in  ques- 
tion from  Tracy  in  the  honest  belief  that  he  was  in  fact  the  owner 
thereof;  that  the  name  and  occupation  of  Tracy — viz.  "George 
Tracy,  Piano  Mover" — were  on  the  wagon  when  he  offered  it  for 
sale,  and  that  fact  was  referred  to  as  indicating  his  ownership  of  the 
property,  etc. ;  that,  Tracy  being  a  stranger,  defendant  was  specially 
careful  to  inquire  and  inform  himself  that  the  person  who  was  in 
possession  of  and  offering  to  sell  the  wagon  was  the  George  Tracy 
whose  name  and  occupation  were  painted  thereon ;  that  Tracy's  narnc 


WHO   CAN    SELL  21 

and  occupation  were  put  upon  the  wagon  with  the  knowledge  of 
O'Connor,  the  original  plaintiff,  and  himself,  and  by  direction  of  the 
former,  for  the  purpose  of  creating  the  impression  and  inducing  the 
public  to  believe  that  the  property  belonged  to  Tracy,  and  was  being 
used  by  him  in  his  business  as  a  piano  mover,  in  which  he  had  there- 
tofore been  engaged.  Without  attempting  to  summarize  the  testi- 
mony relied  on  by  the  defendant,  it  is  sufficient  to  say  that  it  tends 
to  prove  substantially  the  state  of  facts  above  outlined,  and  especially 
that  the  original  plaintiff,  for  his  own  gain  and  benefit,  was  a  party 
to  the  arrangement  whereby  Tracy's  name  was  put  on  the  wagon 
for  the  purpose  of  misleading  the  public  into  the  belief  that  the 
property  was  his,  and  that  defendant,  acting  with  due  caution  and  in 
good  faith,  was  thus  misled  as  to  the  ownership  of  the  property,  and 
purchased  the  same  from  Tracy. 

While  the  soundness  of  the  general  rule  of  law  that  a  vendee  of 
personal  property  takes  only  such  title  or  interest  as  his  vendor  has 
and  is  authorized  to  transfer  cannot  for  a  moment  be  doubted,  it  is 
not  without  its  recognized  exceptions.  One  of  these  is  where  the 
owner  has  so  acted  with  reference  to  his  property  as  to  invest  anoth- 
er with  such  evidence  of  ownership,  or  apparent  authority  to  deal 
with  and  dispose  of  it,  as  is  calculated  to  mislead,  and  does  mislead, 
a  good-faith  purchaser  for  value.  In  such  cases  the  principle  of 
estoppel  applies,  and  declares  that  the  apparent  title  or  authority,  for 
the  existence  of  which  the  actual  owner  was  responsible,  shall  be  re- 
garded as  the  real  title  or  authority,  at  least  so  far  as  persons  acting 
on  the  apparent  title  or  authority,  and  parting  with  value,  are  con- 
cerned. Strictly  speaking,  this  is  merely  a  special  application  of  the 
broad  equitable  rule  that,  where  one  of  two  innocent  persons  must 
suffer  loss  by  reason  of  the  fraud  or  deceit  of  another,  the  loss  should 
fall  upon  him  by  whose  act  or  omission  the  wrongdoer  has  been 
enabled  to  commit  the  fraud. 

Assuming,  in  this  case,  that  a  jury,  under  the  evidence,  should  find 
— as  we  think  they  would  be  warranted  in  doing — that  such  marks 
of  ownership  were  placed  on  the  property  by  direction  of  O'Connor, 
the  real  owner,  as  were  not  only  calculated  to  deceive,  but  actually 
Intended  to  deceive,  the  public,  and  that  by  reason  thereof,  and  with- 
out any  fraud  or  negligence  on  his  part,  the  defendant  was  misled 
into  the  belief  that  Tracy  was  the  real  owner,  and  he  accordingly 
boughl  and  paid  him  for  the  property,  can  there  be  any  doubt,  as  be- 
tween the  real  owner  and  the  innocent  purchaser,  that  the  loss  should 
fall  upon  the  former,  by  whose  acl  Tracy  was  enabled  to  thus  fraud 
ulently  jell  and  receive  the  price  of  the  property?  We  think  not. 
In  Barnard  v.  Campbell,  55  X.  Y.  456,  14  Am.  Rep.  289 j  Id.,  58  N. 
Y.  73,  17  Am.  Rep.  208,-  a  well  considered  case,  involving  sub 
stantially  the  same  principle,  it  was  held  thai  to  create  an  estoppel 
by  which  an  owner  is  prevented  from  a  serting  title  to  and  is  di 
prived  of  his  property  by  the  acl  of  a  third  person,  without  his 


22  FORMATION    OF    THE    CONTRACT 

sent,  two  things  must  concur:  "(1)  The  owner  must  have  clothed 
the  pnsou  assuming  to  dispose  of  the  property  with  the  apparent 
title  to  or  authority  to  dispose  of  it.  (2)  The  person  alleging  the 
estoppel  must  have  acted  and  parted  with  value  .upon  the  faith  of 
such  apparent  ownership  or  authority,  so  that  he  will  be  the  loser 
if  the  appearances  to  which  he  trusted  are  not  real." 

Without  further  consideration  of  the  questions  involved,  we  think 
the  testimony  to  which  reference  has  been  made  tended  to  prove 
facts  which,  if  found  by  the  jury,  would  have  brought  the  case  with- 
in the  principle  of  estoppel  above  stated,  and  that  the  learned  judge, 
by  the  instructions  above  complained  of,  virtually  withdrew  the  ef- 
fect of  that  testimony  from  the  consideration  of  the  jury.  In  defend- 
ant's second  point,  he  was  requested  to  charge :  "If  the  jury  rind 
from  the  evidence  that  the  plaintiff's  intestate  allowed  Tracy  to  put 
his  name  on  the  wagon,  and  made  no  effort  to  efface  it,  and  thereby 
allowed  the  defendant  to  be  misled,  their  verdict  must  be  for  the  de- 
fendant." This  was  refused,  with  the  remark  that  he  had  already 
instructed  them  that  their  verdict  ought  to  be  for  the  plaintiff  in 
the  event  of  their  believing  the  testimony. 

It  follows  from  what  has  been  .said  that  the  first  and  third  specifi- 
cations should  be  sustained.  The  second  specification  is  dismissed. 
As  presented,  defendant  was  not  entitled  to  an  affirmance  of  the  point 
therein  recited.  Judgment  reversed,  and  a  venire  facias  de  novo 
awarded. 


JETTON  v.  TOBEY. 

(Supreme  Court  of  Arkansas,  1896.     62  Ark.  84,  34  S.   W.  531.) 

Replevin  by  A.  P.  Jetton  against  Franklin  Tobey.  There  was  a 
judgment  for  defendant,  and  plaintiff  appeals. 

Battle,  J.4  Three  creditors  of  David  B.  Looney,  to  wit,  Fleet- 
wood Morris,  R.  M.  Jetton,  and  J.  P.  Falconer,  brought  three  sepa- 
rate actions  against  him  before  a  justice  of  the  peace  of  Sebastian 
county,  each  one  suing  for  himself,  and  causing  an  order  of  attach- 
ment to  be  issued  in  his  case.  A.  P.  Jetton  was  duly  appointed  spe- 
cial constable  to  serve  process  in  the  action  instituted  by  R.  M. 
Jetton.  A  mare  and  other  property  of  the  defendant  were  attached, 
the  mare  being  first  attached  in  the  suit  instituted  by  R.  M.  Jetton, 
and  thereafter  in  the  other  two  actions.  After  this  the  attaching 
creditors  met  to  divide  the  property  among  themselves,  some  wit- 
nesses say,  for  the  purpose  of  saving  costs,  and  to  hold  subject  to  the 
attachments,  and  another  says,  for  the  purpose  of  paying  the  debts 
of  the  defendant  to  themselves,  the  brother  of  the  defendant,  who 
had  possession  of  the  property  at  the  time  it  was  attached,  assenting. 

4  Part  of  the  opinion  is  omitted. 


wno  CAN  SELL  23 

In  the  division  the  mare  was  delivered  to  Falconer,  who  carried  her 
to  Franklin  county,  and  sold  her  to  Franklin  Tobey  on  a  credit. 

Thereafter  A.  P.  Jetton,  who  served  the  order  of  attachment  sued 
out  by  R.  M.  Jetton,  demanded  the  mare  of  Tobey,  and,  he  refusing 
to  comply  with  the  demand,  brought  this  action  against  him  for  her 
possession  in  Franklin  county.  The  property  sued  for  was  delivered 
to  the  plaintiff.  In  the  meantime  David  B.  Looney,  having  been  ab- 
sent, returned,  and  compromised  and  paid  his  indebtedness  to  Mor- 
ris and  R.  M.  Jetton ;  and  the  three  actions  against  Looney  were 
dismissed,  the  attachments  were  discharged,  and  the  mare  was  re- 
turned to  him  (Looney)  by  A.  P.  Jetton,  who  had  previously  gained 
possession  of  her  by  the  suit  against  Tobey.  The  dismissal  of  the 
action  of  Jetton  against  Looney  and  the  discharge  of  the  attach- 
ment therein  were  subsequent  to  the  institution  of  the  suit  against 
Tobey.  There  does  not  appear  to  have  been  any  payment  of  the 
indebtedness  of  Looney  to  Falconer. 

In  the  trial  of  the  issues  in  the  action  against  Tobey  the  foregoing 
facts  were  shown  by  the  evidence.  It  was  further  shown  that  Tobey 
had  no  notice  of  any  defect  in  the  title  of  Falconer  to  the  mare  at 
the  time  he  purchased  her.     *     *     * 

The  jury  returned  a  verdict  in  favor  of  the  defendant.  A  judg- 
ment was  rendered  accordingly,  and  the  plaintiff  appealed. 

The  jury  were  virtually  told  by  the  instructions  of  the  court  that 
if  Tobey  purchased  the  property  in  controversy  in  good  faith,  with- 
out any  notice  of  any  defect  in  the  title  of  his  vendor,  he  was  entitled 
to  recover,  notwithstanding  the  person  from  whom  he  purchased 
had  and  was  entitled  to  nothing  more  than  possession.  That  is  not 
true. 

A  general  rule  of  the  law  of  personal  property  is  that  no  man  can 
sell  that  which  he  has  not,  and  is  not  authorized  by  the  owner  to 
transfer,  or  confer  a  better  title  than  that  he  has.  An  honest  pur- 
chaser under  a  defective  title  cannot  hold  against  the  true  propri- 
etor, o  '>ne  can  transfer  to  another  a  better  title  than  he  has 
himself,  is  a  maxim,"  says  Chancellor  Kent,  "alike  of  the  common 
and  civil  law,  and  a  sale  ex  vi  termini  imports  nothing  more  than 
that  the  bona  fide  purchaser  succeeds  to  the  rights  of  the  vendor." 
To  this  rule,  however,  there  are  exceptions.  Among  them  are 
enumerated  the  following:  Transfers  of  money,  bank  bills,  checl 
and  notes  payable  to  bearer,  or  transferable  by  delivery  in  the  or- 
dinary course  of  business  to  a  person  taking  them  bona  fide  and 
paying  value  for  them  (Fawcetl  v.  Osborn,  32  111.  411,  83  Am.  Dec. 
i;  bona  fide  pui  from  fraudulenl  buyers,  or  others  hav- 
ing a  voidable  or  defeasible  title;  and,  in  England,  sales  in  market 
overt,  an  exception  which  do<     nol  prevail  in  this  country.     *     *     * 

Ti  ion  of  personal  property,  withoul  other  evidem 

of  title,  or  authority  from  the  owner  to    ell,  will  nol  enable  the  pos 
■  •     confer  a  better  title  than  he  actually  has.    As  said  by  Chief 


24  FORMATION    OF    THE    CONTRACT 

Justice  Brickell  in  Leigh  v.  Railroad  Co.,  58  Ala.  178:  "Possession  is 
prima  facie  evidence  of  the  ownership  of  all  species  of  personal  prop- 
erty. It  is  but  prima  facie,  and  whoever  deals  alone  on  the  faith  of  it 
must  accept  it  as  such,  and  in  subordination  to  the  paramount  title, 
which  would  prevail  over  it  if  the  possession  was  not  changed  by  the 
transaction  into  which  he  enters.  If  this  be  not  true,  a  felon  acquir- 
ing possession  by  theft  could,  by  a  sale  to  an  innocent  purchaser,  di- 
vest the  true  owner  of  his  property.  A  naked  bailee,  intrusted  with 
possession,  could  dispose  of  goods  to  the  prejudice  of  his  principal. 
A  case  does  not  fall  within  the  exception  unless  the  owner  confers  on 
the  vendor  other  evidence  of  ownership,  or  of  authority  to  dispose  of 
the  goods,  than  mere  possession."  As  an  example  take  the  case  of 
Simpson  v.  Shackelford,  49  Ark.  63,  4  S.  W.  165.  The  owner  in  that 
case  conditionally  sold  and  delivered  a  corn  mill,  with  the  understand- 
ing that  the  title  would  remain  in  him  until  the  purchase  money  was 
paid.  The  vendee  sold  to  another  without  any  notice  of  any  defect  in 
his  title,  and  delivered  possession.  The  purchase  money  of  the  first 
sale  was  not  paid,  and  the  original  vendor  sued  for  the  property, 
and  recovered  it;  the  court  holding  that  the  second  vendee,  though 
a  bona  fide  purchaser,  acquired  no  title  as  against  him.  McMahon 
v.  Sloan,  12  Pa.  229,  51  Am.  Dec.  601 ;  Andrew  v.  Dieterich,  14  Wend. 
(N.  Y.)  31;  Covill  v.  Hill,  4  Denio  (N.  Y.)  323. 

If,  in  this  case,  Falconer  did  not  acquire  title  to  the  mare  in  con- 
troversy by  purchase  from  Looney,  or  an  agent  authorized  to  dis- 
pose of  her  in  payment  of  his  debts,  he  was  a  mere  custodian  of  her 
at  the  time  he  sold  her  to  Tobey,  and  held  her  subject  to  the  right 
of  the  special  constable  to  take  possession.  He  could  have  acquired 
no  other  right  from  A.  P.  Jetton  in  his  official  capacity;  and,  conse- 
quently, if  this  was  all  the  claim  he  had,  transferred  no  title  by  the 
sale  to  Tobey. 

Another  fact  that  defeats  Tobey's  right  to  the  claims  of  a  bona 
fide  purchaser  is,  he  purchased  on  a  credit,  and  never  paid  the  pur- 
chase money. 

A.  P.  Jetton,  as  special  constable,  acquired  a  special  property  and 
right  to  the  possession  of  the  property  when  he  seized  under  the  or- 
der of  attachment,  and  had  the  right  to  institute  this  action.  He  was 
liable  to  David  B.  Looney  for  her  when  the  attachments  were  dis- 
charged, if  Looney  was  then  her  owner,  and,  of  course,  was  entitled 
to  her  possession  for  the  purpose  of  discharging  that  obligation. 
*     *     *     Reversed. 


SUBJECT-MATTER    OF   SALE  25- 


III.  Subject-Matter  of  Sale  5 


HALL  v.  GLASS  et  al. 

(Supreme  Court  of  California,  1899.     123  Cal.  500,  56  Pac.  336,  69  Am. 

St.  Rep.  77.) 

Commissioners'  Decision.  Action  by  Ernest  E.  Hall  against  Albert 
W.  Glass  and  others.  Judgment  for  plaintiff,  and  defendants  Albert 
W.  Glass  and  Jane  Roe  Glass  appeal. 

Prixgle,  C.  Appeal  from  judgment,  with  bill  of  exceptions. 
Action  brought  to  foreclose  a  chattel  mortgage  upon  crops  growing 
and  to  be  grown.  Mortgage  made  to  secure  the  payment  of  a  note 
for  $1,550,  bearing  date,  January  24,  1895,  payable  one  day  after 
date,  and  also  such  other  sums  as  the  mortgagee  might  advance  to  the 
mortgagor  during  the  continuance  of  the  mortgage,  provided  that 
such  advances  shall  be  at  the  exclusive  discretion  and  option  of  the 
mortgagee.  The  mortgage  covers  "all  the  crop  and  products  of  what- 
ever nature  which  are  now  standing  or  growing,  or  which  shall  or 
may  hereafter  at  any  time  be  sown,  planted,  cut,  or  harvested  by  the 
said  party  of  the  first  part  during  the  continuance  of  this  mortgage, 
on  the  following  described  lands  and  premises,  and  every  part  and 
portion  thereof,  to  wit."  Now  follows  description  of  two  parcels 
of  land,  one  owned  by  the  mortgagor,  A.  W.  Glass,  and  known  as 
the  "Glass  Ranch,"  and  the  other  held  by  him  under  lease.  "This 
mortgage  is  intended  to  cover  all  the  land  farmed  by  the  said  A.  W. 
Glass."  The  mortgagor  covenants  that  "he  will  carefully  tend,  take 
care  of,  and  protect  the  said  crop  while  growing  and  until  fit  for  har- 
vesting, and  then  faithfully  and  without  delay  harvest,  thresh,  clean, 
and  sack  all  the  grain  of  every  description  raised  upon  said  premises, 
and  bale  all  the  hay  raised  thereon  in  bales  of  approved  and  merchant- 
able sizes,  and  put  all  the  other  products  raised  upon  said  premises  in 
shape  for  market,  and  immediately  deliver  all  said  products  into  the 
possession  of  the  party  of  the  second  part  in  the  town  of  Pleasanton,v 
etc. 

A.  W.  Glass,  the  mortgagor,  filed  his  petition  in  insolvency  on  Oc- 
tober, 23,  1895,  and  was  discharged  from  his  debts  on  March  11, 
"Prior  to  the  filing  of  the  petition  in  insolvency,  but  subsequent 
to  the  making  of  note  and  mortgage,"  I..  I'..  Glass  made  a  declaration 
of  homestead  upon  the  Glas  ranch,  and  the  same  was  set  apart  as 
homestead  by  the  insolvency  court  by  order  of  December  7,  1895. 
A.  W.  Glass  has  always  continued  in  po  i  ion  of  the  Glass  ranch. 
In  the  foreclosure  proceeding  receiver  was  appointed  to  take  pos- 
session and  manage  the  crops  of  the  year  1895;  and  another  receiver 

o  For  i  [on  of  principles,  see  Tiffany,  Bales  (2d  Ed.)  §§  11%-13. 


26  FORMATION    OF    THE    CONTRACT 

was  appointed  to  take  possession  and  manage  the  crops  of  1896.  A 
decree  was  entered  in  favor  of  the  plaintiff,  directing  the  receivers  to 
apply  the  proceeds  of  the  crops  of  those  two  years  in  their  hands 
towards  the  payment  of  the  amount  found  due  to  plaintiff.  No  other 
relief  is  granted.  Appeal  from  the  judgment  is  taken  by  A.  W.  Glass 
and  L.  B.  Glass,  who  answered,  as  the  wife  of  A.  W.  Glass.  The  de- 
fendant Veale,  sued  as  sheriff  of  Contra  Costa  county,  and  appointed 
assignee  in  insolvency  of  A.  W.  Glass,  does  not  appeal.  There  is  no 
contest  over  the  proceeds  of  the  crop  of  the  year  1895.  The  conten- 
tion of  the  appellants  is  that  the  mortgage  is  not  a  lien  upon  the  crop 
of  1896. 

The  first  point  made  by  the  appellants  is  that  the  crops  to  be  grown 
after  1895  are  not  designated  with  sufficient  certainty  to  create  a  lien 
thereon,  against  the  homestead  right  of  the  appellants  or  the  insolvency 
of  A.  W.  Glass.  There  is  no  serious  contention  that  a  chattel  mort- 
gage cannot  cover  crops  unplanted.  That  point  was  directly  decided 
in  Arques  v.  Wasson,  51  Cal.  620,  21  Am.  Rep.  718.  The  contention 
is  that  the  subject  of  the  mortgage  must  be  clearly  defined,  and  that 
this  mortgage  does  not  define  same  with  sufficient  certainty,  there  being 
no  defined  limit  to  the  continuance  of  the  mortgage  during  which  the 
lien  is  to  continue.  In  support  of  this  position,  counsel  cite  several 
cases  from  Iowa  and  one  from  Nebraska.  The  leading  case  in  Iowa 
is  Pennington  v.  Jones,  57  Iowa,  37,  10  N.  W.  274.  The  mortgage 
covered  sundry  acres  of  grain  of  different  kinds,  "to  be  sown  and 
raised  on  the  land  leased  of  Barber  McDowell,  and  now  occupied  by 
said  W.  A.  McDowell  (the  mortgagor),  lying  and  being  in  section  17," 
etc.  The  court  held  the  mortgage  invalid,  because  it  did  not  state 
"that  all  the  crops  to  be  grown  for  any  specified  number  of  years 
were  mortgaged,"  saying  that  "before  a  mortgage  on  crops  to  be  sown 
or  planted  can  be  regarded  as  valid,  as  against  third  persons,  the  year 
or  term  the  crops  are  to  be  grown  must  be  stated."  In  Muir  v.  Blake, 
57  Iowa,  622,  UN.  W.  621,  the  mortgage  said:  "All  the  crops  raised 
by  me  in  any  part  of  Jones  county  for  the  term  of  three  years."  The 
court  held  that  this  was  a  "roving  description,  with  nothing  in  the 
way  of  identification  to  suggest  inquiry  where  the  crops  may  be  found 
except  the  body  of  the  county."  In  Eggert  v.  White,  59  Iowa,  465, 
13  N.  W.  426 :  "All  and  the  entire  crop  of  flax  and  wheat  and  other 
grain  or  produce  raised  on  the  east  half  of.  *  *  *  "  Held  invalid, 
"because  the  year  the  same  was  to  be  grown  is  not  stated."  In  Cole 
v.  Kerr,  19  Neb.  554,  26  N.  W.  598:  "Seventy-five  acres  of  corn  to 
be  planted,  fifty  acres  of  broom  corn  to  be  planted,  tended,  and  de- 
livered in  June,"  etc.  Held,  that  "to  be  planted"  would  apply  to  all 
corn  "which  might  thereafter  be  found  in  Adams  county."  In  all  of 
these  cases  there  are  elements  of  uncertainty,  either  in  the  place  or 
time  of  the  planting.  In  the  present  case  the  description  of  the  premises 
is  specific.  The  alleged  element  of  uncertainty  is  the  term  "during 
the  continuance  of  the  mortgage." 


SUBJECT-MATTER   OF   SALE  27 

The  appellants  contend  that  the  provision  in  the  mortgage  that  it 
is  intended  to  secure  any  future  advances  which  mortgagee  may  make 
to  mortgagor  introduces  an  element  of  uncertainty,  in  this:  That  by 
such  advances  the  mortgage  may  be  kept  alive  indefinitely  beyond  the 
statutory  time  of  the  note.  There  is,  however,  under  our  decisions, 
a  limit  to  the  continuance  of  a  mortgage  as  against  subsequent  pur- 
chasers or  incumbrancers.  In  a  line  of  cases  in  this  court,  beginning 
with  Lord  v.  Morris,  18  Cal.  482,  it  has  been  well  settled  that  subse- 
quent purchasers  or  incumbrancers  may  rely  upon  the  apparent  ex- 
piration of  the  mortgage,  and  will  hold  against  a  prior  mortgage  in 
spite  of  an  extension  or  renewal  of  the  debt  beyond  its  statutory  life. 
By  the  same  reasoning,  subsequent  advances,  although  contracted  for 
by  the  mortgagor,  cannot  extend  the  apparent  maturity  of  the  mort- 
gage against  subsequent  purchasers.  This  rule,  in  reference  to  future 
advances,  as  laid  down  in  the  cases,  is  a  limit  to  the  life  of  a  mortgage. 
It  is  said  in  Tapia  v.  Demartini,  77  Cal.  387,  19  Tac.  641,  11  Am.  St. 
Rep.  288,  that,  where  a  mortgage  is  given  to  secure  future  advances, 
the  mortgagee  cannot  safely  make  such  advances  where  he  has  actual 
notice  of  a  sale  or  incumbrance  made  by  the  mortgagor.  And  in  Jones, 
Chat.  Mortg.  (3d  Ed.)  §  97,  it  is  said:  "The  general  rule  is  that  a 
prior  mortgagee  is  affected  only  by  actual  notice  of  a  subsequent  in- 
cumbrance, and  not  by  constructive  notice ;  but  there  are  numerous 
authorities  which  hold  that  if  the  mortgagee  has  the  option  to  make 
the  advances  or  not,  as  he  chooses,  the  mortgage,  as  to  each  advance 
made  upon  it,  is  to  be  regarded  as  a  fresh  mortgage,  and  is  subject  to 
the  lien  of  any  incumbrance  which  has  been  duly  recorded  at  the  time 
the  advance  is  made,  whether  the  mortgagee  has  actual  notice  of  it 
or  not. " 

In  view  of  these  authorities,  the  term  "during  the  continuance  of 

mortgage"  has  a  defined  meaning.     It  cannot  be  said,  as  claimed 

by  the  appellants,  that  the  mortgage  could  be  continued  ad  infinitum. 

in  any  event,  the  mortgage  is  good  to  the  extent  of  the  crops  planted 

during  the  life  of  the  note.     The  uncertainty  of  description  insisted 

upon  by  appellants  is  in  the  doubtful  period  beyond  the  life  of  the  note. 

There  can  be  no  question  that  the  mortgage  may  be  good  to  the  extent 

.hat  is  certain  and  definite,  even  if  it  be  bad  for  the  rest.     In  one 

of  tin'  i  ited  by  the  appellants  (Luce  v.  Moorehead,  7$  Iowa, 

X.  W.  598  1 5  Am.  St.  Rep.  695]),  it  was  said:    "An  instrument 

.-  be  valid  as  to  the  property  sufficiently  described,  and  void    for 

the  uncertainty  of  the  description  of  oilier  property."    This  view 

ni!.'  lent  to  sustain  the  ruling  of  the  court  below, 
w hii  li  nly  to  the  crops  <>f  the  first  two  years. 

Anoth  tention  of  the'  appellants  is  that,  the  proceedings  in  in 

v  having  been  in  tituted  in  L895,  there  was  then  no  lien  u] 
the  6  which  were  then  unplanted,  and,  the  debl  being  dis- 

ci by  tl  .  there  was  no  debl  to  sustain  any  lien  to 

er  when  the  crop  began  to  have  an  existence.    They  cite 


28  FORMATION    OF    THE    CONTRACT 

the  case  of  Mayer  v.  Taylor,  69  Ala.  403,  44  Am.  Rep.  522,  to  the 
effect  that  the  lien  actually  attaches  only  when  the  property  comes  into 
existence.  But  the  case  recognizes  the  equitahle  lien  attaching  to 
the  potential  existence,  by  virtue  of  which  the  mortgage  of  an  unplanted 
crop  is  valid.  The  case  holds  that  this  equitable  mortgage  was  su- 
perior to  a  subsequent  mortgage  made  after  the  crop  was  planted.  And 
our  case  of  Arques  v.  Wasson,  supra,  rests  upon  the  same  ground, — 
that  there  is  in  such  cases  a  potential  existence  which  sustains  the  lien 
of  the  mortgage.  After  this  lien  is  created,  insolvency  proceedings 
cannot  affect  the  debt  to  the  impairment  of  the  lien.  In  Arques  v. 
Wasson  this  lien  prevailed  against  an  attachment  and  execution.  In 
Mayer  v.  Taylor  it  prevailed  against  a  mortgage  made  after  the  crop 
was  planted.  Certainly,  proceedings  in  insolvency  have  no  stronger 
legal  or  equitable  force  than  purchasers  for  valuable  consideration. 
But,  say  the  appellants,  this  is  a  contract  for  continuing  personal 
services ;  and  they  cite  the  case  of  Mooney  v.  Detrick,  85  Cal.  549,  22 
Pac.  1111,  26  Pac.  280,  which  holds  that  the  debt  due  by  one  who 
engages  the  time  and  services  of  another  is  discharged  by  the  insol- 
vency. Conceding,  without  deciding,  that  the  converse  of  this  is 
sound, — that  a  covenantor  is  released  from  his  contract  for  service  by 
insolvency, — yet  the  personal  services  in  this  case  are  not '  the  debt 
or  of  the  essence  of  the  debt.  The  covenant  of  this  mortgage  that 
the  mortgagor  should  tend,  protect,  and  take  care  of  the  crop,  and 
deliver  it  to  the  mortgagee,  is  merely  collateral  to  the  real  indebted- 
ness, and  for  the  better  enforcement  of  the  lien.  By  virtue  of  the  debt 
and  the  lien,  the  mortgagee  is  entitled  to  hold  all  the  crops  grown  and 
tended  by  the  mortgagor;  and  the  mortgagor  covenants  to  tend  and 
protect  the  crops,  and  deliver  them  to  the  mortgagee.  That  his  serv- 
ices in  that  respect  are  not  the  debt  which  the  mortgage  secures,  nor 
of  the  essence  of  the  debt,  is  made  clear  by  the  fact  that  provision  is 
made  in  the  mortgage  that,  in  case  of  his  breach  of  this  covenant,  the 
mortgagee  might  enter  upon  the  premises,  and  take  all  measures  nec- 
essary for  the  protection  of  the  crops  and  products,  and  expressly 
appointing  the  mortgagee  the  attorney  of  the  mortgagor  for  that  pur- 
pose. The  covenants  in  that  respect  are  very  significant:  "And  the 
party  of  the  first  part  does  hereby  covenant  and  agree  to  and  with 
the  said  party  of  the  second  part,  its  successors  and  assigns,  that  he 
and  they  will  carefully  tend,  take  care  of  *  *  * ;  that,  in  default 
of  any  or  either  of  the  above  acts  to  be  done  by  the  said  party  of  the 
first  part,  the  party  of  the  second  part,  his  successors  or  assigns,  may 
enter  into  or  upon  the  said  premises,  and  take  all  measures  necessary 
for  the  protection  of  said  crops  or  products  or  his  interest  therein,, 
etc.  *  *  *  And  the  said  party  of  the  first  part  does,  for  the  pur- 
pose aforesaid,  make,  constitute,  and  appoint  the  said  party  of  the 
second  part,  or  his  successors  or  assigns,  his  true  and  lawful  attorney 
irrevocable,  with  full  power  to  enter  upon  said  premises  and  take  pos- 
session of  said  crops  and  take  care   of,  protect,  thresh,  clean,   and 


SUBJECT-MATTER   OF   SALE  29 

sack  or  bale  the  same  in  case  of  any  default  on  the  part  of  the  cove- 
nants herein  contained."  It  would  be  unreasonable  to  hold  that  a 
release  of  the  mortgagor  from  these  subsidiary  services  would  de- 
stroy the  lien  which  is  so  carefully  guarded  against  any  injury  to 
arise  from  the  absence  of  the  subsidiary  services.  And  the  case  is 
stronger,  if  possible,  against  an  insolvent  who  himself  institutes  pro- 
ceedings to  disqualify  himself. 

Substantially  the  same  argument  is  urged  by  appellants  in  reference 
to  the  declaration  of  homestead  made  after  the  mortgage,  and  before 
the  crop  of  1896  was  planted.  But  the  argument  has  no  greater  force 
in  favor  of  a  homestead  right  than  in  favor  of  a  sale  for  value  or 
proceeding  in  insolvency.  Establish  the  fact  that  there  is  sufficient 
potential  existence  in  the  coming  crops  to  sustain  a  legal  or  equitable 
lien  upon  them,  and  the  lien  must  prevail  against  subsequent  pur- 
chasers of  every  kind;  otherwise,  it  is  no  lien  at  all.  The  objection 
made  in  all  the  cases  to  the  descriptions  is  that  they  are  not  sufficient 
to  impart  notice.  In  one  of  the  cases  cited  by  appellants  the  certainty 
of  description  required  is  said  to  be  "sufficient  if  it  be  such  as  to  en- 
able third  parties,  by  inquiries,  which  the  instrument  itself  indicates 
and  directs,  to  identify  the  property  covered  by  it."  Muir  v.  Blake, 
57  Iowa,  665,  UN.  W.  623.  As  the  alleged  element  of  uncertainty 
in  this  case  was  the  continuance  of  the  mortgage,  the  fact  that  it  was 
in  force  in  1895  and  1896  was  within  the  knowledge  of  one  homestead 
claimant,  and  easily  ascertained  by  the  other. 

Appellants  insist  that  there  is  error  in  not  making  a  specific  finding 
that  L.  B.  Glass  is  the  wife  of  A.  W.  Glass.  But  her  rights  were 
protected.  She  was  a  party  to  the  action.  She  answered  as  the  wife, 
declaring  herself  to  be  his  wife.  It  is  found  that  she  made  a  declara- 
tion of  homestead  upon  his  property;  and  she  set  up  in  her  answer 
the  homestead  which  she  had  declared  upon  the  land  of  her  husband. 
Under  these  circumstances,  the  absence  of  a  special  finding  has  done 
her  no  harm. 

Criticism  is  made  of  the  form  of  the  decree,  the  point  of  objection 
being  that  it  contains  the  usual  clause  that  the  defendants  and  those 
claiming  under  them  are  barred  and  foreclosed  of  all  equity  of  re- 
demption in  or  claim  to  "the  mortgaged  property,"  but  that  no  sale 
of  property  is  ordered.  The  operative  words  of  the  decree  are  that 
the  moneys  which  have  come  into  the  bands  of  the  receivers  from  the 
s  of  the  crops  of  1895  and  1896  be  applied  towards  the  payment  of 
the  ascertained  debt.  These  sales  appear  to  have  been  made  by  the 
ivers  under  orders  of  court  presumably  correct,  as  no  objection  to 
them  appears  in  the  records.  The  clause  by  which  the  defendants  are 
barred  and  foreclosed  of  any  right  of  redemption  "in  the  moi 
property"  cannot  he  appropriately  applied  to  any  future  crops  nol 
sold  or  ordered  to  he  sold,  hut  may  properly  he  referred  to  what  have 
been  sold  by  the  receivers,  and  the  proceeds  of  which  are  ordered 
to  be  applied  towards  the  payment  of  the  debt.    The  respondent,  in  his 


30  FORMATION    OF    THE    CONTRACT 

points  and  authorities,  declares  that  he  "is  satisfied  with  the  decree"; 
and,  as  there  is  nothing  in  the  decree  reserving  any  right  to  further 
proceedings  in  the  action,  the  jurisdiction  is  exhausted,  and  the  clause 
in  question,  if  error,  is  not  prejudicial.  I  advise  that  the  judgment 
be  affirmed. 

PER  Curiam.    For  the  reasons  given  in  the  foregoing  opinion,  the 
judgment  is  affirmed. 


GRANTHAM  v.  HAWLEY. 
(Court  of  King's  Bench,  1619.    Hobart,  132.) 

Robert  Grantham  brought  an  action  of  debt  upon  an  obligation  of 
forty  pounds  against  Edward  Hawley,  the  condition  whereof  was, 
that  if  a  certain  crop  of  corn  growing  upon  a  certain  piece  of  ground, 
late  in  the  occupation  of  Richard  Sankee,  did  of  right  belong  to  the 
plaintiff,  then  the  defendant  should  pay  him  for  it  twenty  pounds. 
Now  the  case  upon  the  pleading  and  demurrer  fell  out  thus ;  that 
one  Sutton  was  seised  of  the  land,  and  30  Ehz.  in  April,  made  a 
lease  of  it  to  Richard  Sankee  for  twenty-one  years  by  indenture,  and 
did  thereby  covenant,  grant  to  and  with  Sankee,  his  executors  and 
assigns,  that  it  shall  be  lawful  for  him  to  take  and  carry  away,  to  his 
own  use,  such  corn  as  should  be  growing  upon  the  ground  at  the 
end  of  the  term.  Then  Sutton  conveyed  the  reversion  to  the  plaintiff ; 
and  John  Sankee,  executor  to  Richard,  having  sowed  the  corn,  and  that 
being  growing  upon  the  ground  at  the  end  of  the  term,  sold  it  to 
the  defendant.  And  it  was  argued  by  Hutton  for  the  plaintiff,  that 
it  was  merely  contingent  whether  there  should  be  corn  growing  upon 
the  ground  at  the  end  of  the  term,  or  not.  Also,  the  lessor  never  had 
property  in  the  corn ;  and  therefore  could  not  give  nor  grant  it,  but  it 
sounded  properly  in  covenant;  for  the  right  of  the  corn  standing 
in  the  end  of  the  term  being  certain,  accrues  with  the  land  to  the  lessor ; 
and  it  was  said  to  be  adjudged.  And  it  was  agreed  by  the  court  that 
if  A.,  seised  of  land,  sow  it  with  corn,  and  then  convey  it  away  to 
B.  for  life,  remainder  to  C.  for  life,  and  then  B.  die  before  the  corn 
reapt;  now  C.  shall  have  it,  and  not  the  executors  of  B.,  though  his 
estate  was  uncertain. 

Note,  the  reason  of  industry  and  charge  in  B.  fails ;  yet  judgment 
in  this  case  was  given  against  the  plaintiff,  that  is,  that  the  property 
and  very  right  of  the  corn,  when  it  happened,  was  past  away;  for  it 
was  both  a  covenant  and  a  grant.  And  therefore  if  it  had  been  of 
natural  fruits,  as  of  grass  or  hay,  which  run  merely  with  the  land, 
the  like  grant  would  have  carried  them  in  property  after  the  term. 
Now  though  corn  be  fructus  industrialis,  so  that  he  that  sows  it  may 
seem  to  have  a  kind  of  property,  ipso  facto,  in  it,  divided  from  the 
land;  and  therefore  the  executor  shall  have  it,  and  not  the  heirs; 
yet  in  this  case,  all  the  colour  that  the  plaintiff  hath  to  it,  is  by  the 


SUBJECT-MATTER    OF    SALE  31 

land  which  he  claims  from  the  lessor  which  gave  the  corn.  And  though 
the  lessor  had  it  not  actually  in  him,  nor  certain,  yet  he  had  it  po- 
tentially ;  for  the  land  is  the  mother  and  root  of  all  fruits.  There- 
fore he  that  hath  it  may  grant  all  fruits  that  may  arise  upon  it  after 
and  the  property  shall  pass  as  soon  as  the  fruits  are  extant,  as  21 
H.  6.  A  parson  may  grant  all  the  tithe  wool  that  he  shall  have  in 
such  a  year;  yet  perhaps  he  shall  have  none;  hut  a  man  cannot  grant 
all  the  wool  that  shall  grow  upon  his  sheep  that  he  shall  huy  here- 
after; for  there  he  hath  it  neither  actually  nor  potentially.  And 
though  the  words  are  here  not  by  words  of  gift  of  the  corn,  but  that 
it  shall  be  lawful  for  him  to  take  it  to  his  own  use,  it  is  as  good 
to  transfer  the  property;  for  the  intent  and  common  use  of  such 
words,  as  a  lease  without  impeachment  of  waste,  for  the  like  reason, 
and  not  ex  vi  termini,  gives  the  trees. 


HOLROYD  v.    MARSHALL,. 
(House  of  Lords,  1SG2.    10  H.  L.  Cas.  191.) 

James  Taylor  carried  on  the  business  of  a  damask  manufacturer  at 
Hayes  Mill,  Ovenden,  near  Halifax,  in  the  county  of  York.  In  1858 
he  became  embarrassed,  a  sale  of  his  effects  by  auction- took  place,  and 
fhe  Holroyds.  who  had  previously  employed  him  in  the  way  of  his 
business,  purchased  all  the  machinery  at  the  mill.  The  machinery  was 
not  removed,  and  it  was  agreed  that  Taylor  should  buy  it  back  for 
£5,000.  An  indenture,  dated  the  20th  of  September,  1858,  was  ex- 
ecuted, to  which  A.  P.  and  W.  Holroyd  were  parties  of  the  first  part, 
James  Taylor  of  the  second  part,  and  Isaac  Brunt  of  the  third  part. 
This  indenture  declared  the  "machinery,  implements,  and  things  spec- 
ified in  the  schedule  hereunder  written  and  fixed  in  the  said  mil!,'"  to 
belong  to  the  Holroyds;  that  Taylor  had  agreed  to  purchase  the  same 
for  £5,000,  but  could  not  then  pay  the  purchase  money,  wherefore  it 
1,  &c,  that  "all  the  machinery,  implements,  and  things  spec- 
ified in  the  schedule  (hereinafter  designated  'the  said  premises')"  were 
d  to  Brunt,  in  trust  for  Taylor,  until  a  certain  demand  for  pay- 
ment should  be  made  upon  him,  and  then,  in  case  he  should  pa) 
the  Holroyds  a  sum  of  £5,000,  with  interest,  for  him  absolutely.  If 
dffau.lt  in  payment  was  made,  Brunt  was  to  have  power  to  sell,  and 
hold  the  'I  in  pursuance  of  tin-  tip  t  for  sale,  upon  trust,  to  pay 

die  Holroyds,  and  to  pay  the  surplus,  if  any,  to  Taylor.     The  in- 
denture, in  addition  to  a  clause  binding  Taylor,  during  the  continua 
of  the  trust,  to  in  mv  to  the  ext(  <ii  of  £5,000,  contained  the  follov 
tit:   "Thai  all  machinery,  implements,  and  t1  vhich,  duri 

ntinuance  of  tl  hall  he  fixed  or  placed  in  or  about 

the  said  mill,  buildings,  ami  appurtenan  .  in  a  :  liti  >n  to  or  substitu- 
tion for  tin-  -aid  premises,  or  any  part  tl  shall,  during  such  con- 
tinuance as  afore  aid,  he  subject  to  the  trusts,  powers,  provisos,  and 


32  FORMATION    OF    THE    CONTRACT 

declarations  hereinbefore  declared  and  expressed  concerning  the  said 
premises;  and  that  the  said  James  Taylor,  his  executors,  &c,  will 
at  all  times,  during  such  continuance  as  aforesaid,  at  the  request,  &c, 
of  the  said  Holroyds,  their  executors,  &c,  do  all  necessary  acts  for 
assuring  such  added  or  substituted  machinery,  implements,  and  things, 
so  that  the  same  may  become  vested  accordingly."  The  deed  was,  four 
days  afterwards,  duly  registered,  as  a  bill  of  sale,  under  17  &  18  Vict, 
c.  36.  Taylor,  who  remained  in  possession,  sold  and  exchanged  some 
of  the  old  machinery,  and  introduced  some  new  machinery,  of  which 
he  rendered  an  account  to  the  Holroyds  before  April,  1860;  but  no 
conveyance  was  made  of  this  new  machinery  to  them,  nor  was  any 
act  done  by  them,  or  on  their  behalf,  to  constitute  a  formal  taking  of 
possession  of  the  added  machinery.  On  the  2d  April,  1860,  the  Hol- 
royds served  Taylor  with  a  demand  for  payment  of  the  £5,000  and 
interest,  and  no  payment,  being  made,  they,  on  the  30th  April,  took 
possession  of  the  machinery,  and  advertised  it  for  sale  by  auction  on 
the  21st  May  following. 

On  the  13th  April,  1860,  Emil  Preller  sued  out  a  writ  of  scire 
facias  against  Taylor  for  the  sum  of  £155.  18s.  4d.,  damages  and  costs, 
which  was  executed  on  the  following  day  by  James  Davis,  an  officer  of 
Mr.  Garth  Marshall,  then  high  sheriff  of  York.  On  the  10th  May, 
1860,  a  similar  writ,  for  £138.  3s.  3d.,  was  executed  by  Davis,  and  on 
the  25th  May,  1860,  the  property  was  sold  by  the  sheriff.  Notice  was 
given  to  the  sheriff  of  the  bill  of  sale  executed  in  favour  of  the  Hol- 
royds. The  only  part  of  the  machinery  claimed  by  the  execution 
creditors  consisted  of  those  things  which  had  been  purchased  by  Taylor 
since  the  date  of  the  bill  of  sale.  The  sheriff  insisted  on  taking  under 
the  writs  these  added  articles,  and  the  Holroyds,  on  the  30th  May, 
1860,  filed  their  bill  against  the  sheriff,  and  the  other  necessary  par- 
ties, praying  for  an  assessment  of  damages  and  general  relief.  The 
cause  was  heard  before  Vice  Chancellor  Stuart,  who  on  the  27th  July, 
1860,  made  an  order,  declaring  that  the  whole  machinery  in  the  mill, 
including  the  added  and  substituted  articles,  at  the  time  of  the  execu- 
tion, vested  in  the  plaintiffs  by  virtue  of  the  bill  of  sale.  On  appeal, 
before  Lord  Chancellor  Campbell,  on  the  22d  December,  1S60,  the  vice 
chancellor's  order  was  reversed.  This  present  appeal  was  then 
brought. 

Mr.  Malins  and  G.  V.  Yool,  for  appellants.  Mr.  Amphlett  and  Mr. 
Hobhouse,  for  respondents. 

Lord  Chancellor  Westbury,6  after  stating  the  facts  of  the  case, 
said: 

My  lords,  the  question  is  whether  as  to  the  machinery  added  and 
substituted  since  the  date  of  the  mortgage  the  title  of  the  mortgagees, 
or  that  of  the  judgment  creditor,  ought  to  prevail.  It  is  admitted  that 
the  judgment  creditor  has  no  title  as  to  the  machinery  originally  com- 

e  Parts  of  the  opinions  the  Lord  Chancellor  and  Lord.  Chelmsford  are 
omitted. 


SUBJECT-MATTER    OF   SALE 


33 


prised  in  the  bill  of  sale ;  but  it  is  contended  that  the  mortgagees  had 
no  specific  estate  or  interest  in  the  future  machinery.  It  is  also  ad- 
mitted that  if  the  mortgagees  had  an  equitable  estate  in  the  added 
machinery,  the  same  could  not  be  taken  in  execution  by  the  judgment 
creditor. 

The  question  may  be  easily  decided  by  the  application  of  a  few# ele- 
mentary principles  long  settled  in  courts  of  equity.  In  equity  it  is 
not  necessary  for  the  alienation  of  property  that  there  should  be  a 
formal  deed  of  conveyance.  A  contract  for  valuable  consideration,  by 
which  it  is  agreed  to  make  a  present  transfer  of  property,  passes  at 
once  the  beneficial  interest,  provided  the  contract  is  one  of  which  a 
court  of  equity  will  decree  specific  performance.  In  the  language  of 
Lord  Hardwicke,  the  vendor  becomes  a  trustee  for  the  vendee ;  sub- 
ject, of  course,  to  the  contract  being  one  to  be  specifically  performed. 
And  this  is  true,  not  only  of  contracts  relating  to  real  estate,  but  also 
of  contracts  relating  to  personal  property,  provided  that  the  latter  are 
such  as  a  court  of  equity  would  direct  to  be  specifically  performed. 

A  contract  for  the  sale  of  goods,  as,  for  example,  of  five  hundred 
chests  of  tea,  is  not  a  contract  which  would  be  specifically  performed, 
because  it  does  not  relate  to  any  chests  of  tea  in  particular;  but  a 
contract  to  sell  five  hundred  chests  of  the  particular  kind  of  tea  which 
is  now  in  my  warehouse  in  Gloucester,  is  a  contract  relating  to  specific 
property,  and  which  would  be  specifically  performed.  The  buyer  may 
maintain  a  suit  in  equity  for  the  delivery  of  a  specific  chattel  when  it 
is  the  subject  of  a  contract,  and  for  an  injunction  (if  necessary)  to 
restrain  the  seller  from  delivering  it  to  any  other  person. 

The  effect  in  equity  of  a  mere  contract  as  amounting  to  an  aliena- 
tion, may  be  illustrated  by  the  law  relating  to  the  revocation  of  wills. 
If  the  owner  of  an  estate  devises  it  by  will,  and  afterwards  contracts 
to  sell  it  to  a  purchaser,  but  dies  before  the  contract  is  performed,  the 
will  is  revoked  as  to  the  beneficial  or  equitable  interests  in  the  estate, 
for  the  contract  converted  the  testator  into  a  trustee  for  the  purchaser ; 
and,  in  like  manner,  if  the  purchaser  dies  intestate  before  performance 
of  the  contract,  the  equitable  estate  descends  to  his  heir  at  law,  who 
may  require  the  personal  representative  to  pay  the  purchase  money. 
But  all  this  depends  on  the  contract  being  such  as  a  court  of  equity 
would  decree  to  be  specifically  performed. 
Tl  n  be  no  doubt,  then  thai  if  the  up  deed  in  the 

had  contained  nothing  but  the  contract  which  is  involved 
in   the  aforesaid  lant  of  Taylor,  the  mortgagor,   such   contract 

would  have  amounted  to  a  valid  assignment  in  equity  of  the  whole 
of  the  machinery  and  chattels  in  question,  supposing  such  machinery 
and  effects  to  have  been  in  .  and  upon  the  mill  at  the  time 

of  the  execution  of  the  deed. 

lint   it    i>  alleged  that   this  is  not  the  effect  of   the  contract,  because 

it  relates  to  machinery  not  existing  at  the  time,  but  to  be  acquired  and 
Cooi  by  Cases  Saij       8 


34  FORMATION  OP  THE  CONTRACT 

fixed  and  placed  in  the  mill  at  a  future  time.  It  is  quite  true  that  a 
deed  which  professes  to  convey  property  which  is  not  in  existence  at 
the  time  is  as  a  conveyance  void  at  law,  simply  because  there  is  nothing 
to  convey.  So  in  equity  a  contract  which  engages  to  transfer  proper- 
ty, which  is  not  in  existence,  cannot  operate  as  an  immediate  alienation 
merely  because  there  is  nothing  to  transfer. 

But  if  a  vendor  or  mortgagor  agrees  to  sell  or  mortgage  property, 
real  or  personal,  of  which  he  is  not  possessed  at  the  time,  and  he 
receives  the  consideration  for  the  contract,  and  afterwards  becomes 
possessed  of  property  answering  the  description  in  the  contract,  there 
is  no  doubt  that  a  court  of  equity  would  compel  him  to  perform  the 
contract,  and  that  the  contract  would,  in  equity,  transfer  the  beneficial 
interest  to  the  mortgagee  or  purchaser  immediately  on  the  property 
being  acquired.  This,  of  course,  assumes  that  the  supposed  contract 
is  one  of  that  class  of  which  a  court  of  equity  would  decree  the  specific 
performance.  If  it  be  so,  then  immediately  on  the  acquisition  of  the 
property  described  the  vendor  or  mortgagor  would  hold  it  in  trust 
for  the  purchaser  or  mortgagee,  according  to  the  terms  of  the  con- 
tract. For  if  a  contract  be  in  other  respects  good  and  fit  to  be  per- 
formed, and  the  consideration  has  been  received,  incapacity  to  perform 
it  at  the  time  of  its  execution  will  be  no  answer  when  the  means  of 
doing  so  are  afterwards  obtained. 

Apply  these  familiar  principles  to  the  present  case;  it  follows  that 
immediately  on  the  new  machinery  and  effects  being  fixed  or  placed  in 
the  mill,  they  became  subject  to  the  operation  of  the  contract,  and 
passed  in  equity  to  the  mortgagees,  to  whom  Taylor  was  bound  to 
make  a  legal  conveyance,  and  for  whom  he,  in  the  mean  time,  was  a 
trustee  of  the  property  in  question. 

There  is  another  criterion  to  prove  that  the  mortgagee  acquired  an 
estate  or  interest  in  the  added  machinery  as  soon  as  it  was  brought  into 
the  mill.  If  afterwards  the  mortgagor  had  attempted  to  remove  any 
part  of  such  machinery,  except  for  the  purpose  of  substitution,  the 
mortgagee  would  have  been  entitled  to  an  injunction  to  restrain  such 
removal,  and  that  because  of  his  estate  in  the  specific  property.  The 
result  is,  that  the  title  of  the  appellants  is  to  be  preferred  to  that  of 
the  judgment  creditor. 

Some  use  was  made  at  the  bar  and  in  the  court  below  of  the  lan- 
guage attributed  to  Mr.  Baron  Parke  in  the  case  of  Mogg  v.  Baker, 
3  Mees.  &  W.  198.  That  learned  judge  appears  to  have  given,  not 
his  own  opinion,  but  what  he  understood  would  have  been  the  deci- 
sion of  a  court  of  equity  upon  the  case.  He  is  represented  as  speak- 
ing upon  the  authority  of  one  of  the  judges  of  the  court  of  chancery. 
Any  communication  so  made  was  of  course  extra-judicial,  and  there  is 
much  danger  in  making  communications  of  such  a  nature  the  ground 
of  judicial  decision;  but  I  entirely  concur  in  what  appears  to  have 
been  the  principle  intended  to  be  stated ;  for  Mr.  Baron  Parke,  speak- 
ing of  the  agreement  in  the  case,  says,  "It  would  cover  no  specific 


SUBJECT-MATTER   OF    SALE  33 

furniture,  and  would  confer  no  right  in  equity."  I  have  already  ex- 
plained, that  a  contract  relating  to  goods,  but  not  to  any  specific  goods, 
would  not  be  the  subject  of  a  decree  for  specific  performance,  and 
that  a  contract  that  could  not  be  specifically  performed  would  not 
avail  to  transfer  any  estate  or  interest. 

If,  therefore,  the  contract  in  Mogg  v.  Baker  related  to  no  specific 
furniture,  it  is  true  that  it  would  not,  at  the  time  of  its  execution, 
confer  any  right  in  equity;  but  it  is  equally  true  that  it  would  attach 
on  furniture  answering  the  contract  when  acquired,  provided  the  con- 
tract remained  in  force  at  the  time  of  such  acquisition. 

Whether  a  correct  construction  was  put  upon  the  agreement  in 
Mogg  v.  Baker  is  a  different  question,  and  which  it  is  needless  to  con- 
sider, as  I  am  only  desirous  of  showing  that  the  proposition  stated 
by  the  learned  judge  is  quite  consistent  with  the  principles  on  which 
this  case  ought  to  be  decided. 

I  therefore  advise  your  lordships  to  reverse  the  order  of  Lord  Chan- 
cellor Campbell,  and  direct  the  petition  of  rehearing  presented  to  him 
to  be  dismissed,  with  costs. 

Lord  Chelmsford.  My  lords,  this  case,  which  has  become  of 
great  importance,  has  been  twice  fully  and  ably  argued,  there  having 
been  a  difference  of  opinion  amongst  your  lordships  upon  the  first 
argument,  which  made  it  desirable  that  a  second  should  take  place. 
Upon  the  original  argument  I  thought  that  the  decree  of  my  late 
noble  and  learned  friend,  Lord  Campbell,  could  not  be  maintained ; 
but  I  came  to  this  conclusion  with  all  the  deference  due  to  his  great 
legal  experience,  and  with  the  more  doubt  as  to  the  soundness  of  my 
views,  upon  finding  not  only  that  he  adhered  to  his  opinion  on  hearing 
the  question  argued  in  this  house,  but  that  he  was  supported  in  it  by 
my  noble  and  learned  friend,  Lord  WENSLEydalE,  for  whose  judg- 
ment  (it  is  unnecessary  to  say)  I  entertain  the  most  sincere  respect. 
Aware  that  I  was  opposed  to  such  eminent  authorities,  I  listened  to 
the  second  argument  with  the  most  earnest  and  anxious  attention  ;  but 
nothing  which  1  heard  in  the  course  of  it  tended  to  shake  the  • 
which  I  had  originally  formed.  1  should,  therefore,  have  been  com- 
pelled to  -tate  this  opinion  under  such  discouraging  circumstances,  if 
I  had  not  happily  been  fortified  by  the  concurrence  of  the  noble  and 
learned  lord  upon  the  wool  sack,  before  whom  the  last  argument  t< 
place.  His  great  learning  and  long  experience  in  courts  of  equity 
ify  ni'-  now  in  expressing  myself  with  some  confidence  in  a  case 
in  which  his  views  coincide  with  mine,  and  which  is  to  he  decided  Upon 
equitabl  inds  and  princip 

In  considering  the  question,  I  propose  t"  advert  to  the  various  poinl  i 
which  were  touched  upon  in  the  course  of  both  the  arguments,  al- 
though upon  the  l.i  t  occasion  many  were  omitted  which  were  raised 

upon   the   Int.      The   question    in    the   case    is,   whether   the   appellants, 

wh<>  have  an  equitable  title  as  mo  of  certain  machiner}   fi 

and  placed  in  a  mill,  of  which  the  mortgagor,  Jame    Taylor,  was  ten 


36  FORMATION    OF    TITE    CONTRACT 

ant,  are  entitled  to  the  property  which  was  seized  by  the  sheriff,  under 
two  writs  of  execution  issued  against  the  mortgagor,  in  priority  to 
those  executions,  or  either  of  them? 

The  title  of  the  appellants  depends  upon  a  deed  dated  the  20th  Sep- 
tember, 185S.  [His  lordship  here  stated  the  bill  of  sale  and  the  other 
facts  of  the  case.]  The  machinery  sold  by  the  sheriff  was  more  than 
sufficient  to  satisfy  the  first  execution,  and  the  appellants  claiming  a 
preference  over  both  executions,  contend  that  the  possession  taken  by 
them  on  the  30th  April  entitled  them,  at  all  events,  to  priority,  over 
the  second  execution  of  the  11th  May.  The  great  question,  however, 
is,  whether  they  are  entitled  to  a  preference  over  the  first  execution 
by  the  mere  effect  of  their  deed?  or  whether  it  was  necessary  that 
some  act  should  have  been  done  after  the  new  machinery  was  fixed  or 
placed  in  the  mill,  in  order  to  complete  the  title  of  the  appellants? 

It  was  admitted  that  the  right  of  the  judgment  creditor,  who  has 
no  specific  lien,  but  only  a  general  security  over  his  debtor's  property, 
must  be  subject  to  all  the  equities  which  attach  upon  whatever  prop- 
erty is  taken  under  his  execution.  But  it  was  said  (and  truly  said) 
that  those  equities  must  be  complete,  and  not  inchoate  or  imperfect, 
or  in  other  words,  that  they  must  be  actual  equitable  estates,  and  not 
mere  executory  rights. 

What,  then,  was  the  nature  of  the  title  which  the  mortgagees  ob- 
tained under  their  mortgage  deed?  If  the  question  had  to  be  decided 
at  law,  there  would  be  no  difficulty.  At  law  an  assignment  of  a  thing 
which  has  no  existence,  actual  or  potential,  at  the  time  of  the  ex- 
ecution of  the  deed,  is  altogether  void.  Robinson  v.  Macdonnell,  5 
Maule  &  S.  228.  But  where  future  property  is  assigned,  and  after 
it  comes  into  existence,  possession  is  either  delivered  by  the  assignor, 
or  is  allowed  by  him  to  be  taken  by  the  assignee,  in  either  case  there 
would  be  the  novus  actus  interveniens  of  the  maxim  of  Lord  Bacon, 
upon  which  Lord  Campbell  rested  his  decree,  and  the  property  would 
pass. 

It  seemed  to  be  supposed  upon  the  first  argument  that  an  assignment 
of  this  kind  would  not  be  void  in  law  if  the  deed  contained  a  license 
or  power  to  seize  the  after-acquired  property.  But  this  circumstance 
would  make  no  difference  in  the  case.  The  mere  assignment  is  itself 
a  sufficient  declaratio  prcecedens  in  the  words  of  the  maxim;  and 
although  Chief  Justice  Tindal,  in  the  case  of  Lunn  v.  Thornton,  1  C. 
B.  379,  said,  "It  is  not  a  question  whether  a  deed  might  not  have  been 
so  framed  as  to  give  the  defendant  a  power  of  seizing  the  future  per- 
sonal goods,"  he  must  have  meant,  that  under  such  a  power  the  as- 
signee might  have  taken  possession,  and  so  have  done  the  act  which 
was  necessary  to  perfect  his  title  at  law.  This  will  clearly  appear  from 
the  case  of  Congreve  v.  Evetts,  10  Exch.  298,  in  which  there  was  an 
assignment  of  growing  crops  and  effects  as  a  security  for  money  lent, 
with  a  power  for  the  assignee  to  seize  and  take  possession  of  the 
crops  and  effects  bargained  and  sold,  and  of  all  such  crops  and  effects 


SUBJECT-MATTER   OF   SALE 


37 


as  might  be  substituted  for  them ;  and  Baron  Parke  said,  "If  the  au- 
thority given  by  the  debtor  by  the  bill  of  sale  had  not  been  executed, 
it  would  have  been  of  no  avail  against  the  execution.  It  gave  no  legal 
title,  nor  even  equitable  title,  to  any  specific  goods ;  but  when  executed 
not  fully  or  entirely,  but  only  to  the  extent  of  taking  possession  of  the 
growing  crops,  it  is  the  same  in  our  judgment  as  if  the  debtor  himself- 
had  put  the  plaintiff  in  actual  possession  of  those  crops."  And  in 
Hope  v.  Hayley,  5  El.  &  Bl.  830,  845  (a  case  much  relied  upon  by  the 
vice  chancellor),  where  there  was  an  agreement  to  transfer  goods,  to 
be  afterwards  acquired  and  substituted  with  a  power  to  take  posses- 
sion of  all  original  and  substituted  goods,  Lord  Campbell,  Chief 
Justice,  said,  "The  intention  of  the  contracting  parties  was,  that  the 
present  and  future  property  should  pass  by  the  deed.  That  could  not 
be  carried  into  effect  by  a  mere  transfer ;  but  the  deed  contained  a 
license  to  the  grantee  to  enter  upon  the  property,  and  that  license,  when 
acted  upon,  took  effect  independently  of  the  transfer." 

I  have  thought  it  right  to  dwell  a  little  upon  these  cases,  both  on 
account  of  some  expressions  which  were  used  in  argument  respecting 
them,  and  also  because  in  determining  the  present  question  it  is  useful 
to  ascertain  the  precise  limits  of  the  doctrine  as  to  the  assignment  of 
future  property  at  law.  The  decree  appealed  against  proceeds  upon 
the  ground,  not  indeed  that  an  assignment  of  future  property,  with- 
out possession  taken  of  it,  would  be  void  in  equity  (as  the  cases  to 
which  I  have  referred  show  that  it  would  be  at  law),  but  that  the 
equitable  right  is  incomplete  and  imperfect  unless  there  is  subsequent 
possession,  or  some  act  equivalent  to  it  to  perfect  the  title. 

In  considering  the  case  it  will  be  unnecessary  to  examine  the  au- 
thorities cited  in  argument,  to  show  that  if  there  is  an  agreement  to 
transfer  or  to  charge  future  acquired  property,  the  property  passes, 
or  becomes  liable  to  the  charge  in  equity,  where  the  question  has 
arisen  between  the  parties  to  the  agreement  themselves.  In  order  to 
determine  whether  the  equity  which  is  created  under  agreements  of 
this  kind  is  a  personal  equity  to  be  enforced  by  suit,  or  to  be  made 
available  by  some  act  to  be  done  between  the  parties,  or  is  in  the  nature 
of  a  trust  attaching  upon  and  binding  the  property  at  the  instant  of 
its  coming  into  existence,  we  must  look  to  cases  where  the  rights  of 
the  third  persons  intervene. 

The  respondents,  in  support  of  the  decree,  relied  strongly  on  what 
was  laid  down  by  Baron  Parke  in  Mogg  v.  Baker,  3  Mees.  &  \V.  195, 
198,  as  the  mle  in  equity  which  he  stated  In-  had  derived  from  a  very 
high   authority,  "that  if  th<  ■  ment  was  to  mortgage  certain  specific 

furniture,  <>f  which  the  corpus  was  ascertained,  that  would  constitute  an 
equitable  title  in  the  defendant,  so  as  to  prevent  it  passing  to  the  as- 
signees of  tin  in  olvent,  and  llien  the  assignment  would  make  that 
equitable  title  a  legal  one;  but  if  it  was  only  an  agreemenl  to  mort- 
e  furniture  to  In-  subsequently  acquired,  or"  (the  word  "or"  is 
omitted  in  the  report)  "to  k1vc  a  bill  of    ale  at  a  future  day  of  the 


oS  FORMATION  OP  THE  CONTRACT 

furniture  and  other  goods  of  the  insolvent,  then  it  would  cover  no 
Specific  furniture,  and  would  confer  no  right  in  equity."  The  mean- 
ing of  these  latter  words  must  he  that  there  would  he  no  complete 
equitable  transfer  of  the  property,  because  there  can  he  no  douht  that 
the  agreement  stated  would  create  a  right  in  equity  upon  which  the 
party  entitled  might  file  a  hill  for  specific  performance. 

This  point  is  so  clear  that  it  is  almost  unnecessary  to  refer  to  the 
observations  of  Lord  Eldon  in  the  case  of  The  Warre,  8  Price,  269,  n. 
in  support  of  it.  It  must  also  be  observed,  that  the  proposition  in 
Mogg  v.  Baker  hardly  reaches  the  present  question,  because  it  is 
not  stated  as  a  case  of  an  actual  transfer  of  future  property,  but  as 
an  agreement  to  mortgage,  or  to  give  a  bill  of  sale  at  a  future  day. 
The  only  equity  which  could  belong  to  a  party  under  such  an  agreement 
would  be  to  have  a  mortgage  or  a  bill  of  sale  of  the  future  property 
executed  to  him.  It  does  not  meet  a  case  like  the  present,  where  it  is 
expressly  provided  that  all  additional  or  substituted  machinery  shall 
be  subject  to  the  same  trusts  as  are  declared  of  the  existing  machinery. 

Under  a  covenant  of  this  description  to  hold  that  that  trust  attaches 
upon  the  new  machinery  as  soon  as  it  is  placed  in  the  mill,  is  to  give 
an  effect  to  the  deed  in  perfect  conformity  with  the  intention  of  the 
parties,  and  as,  by  the  terms  of  the  deed,  Taylor  was  to  remain  in 
possession,  the  act  of  placing  the  machinery  in  the  mill  would  appear 
to  be  an  act  binding  his  conscience  to  the  agreed  trust  on  behalf  of 
the  appellants,  and  nothing  more  would  appear  to  be  requisite,  unless 
by  the  established  doctrine  of  a  court  of  equity  some  further  act  was 
indispensable  to  complete  their  equitable  title. 

The  judgment  of  Lord  Campbell,  resting,  as  he  states,  upon  Lord 
Bacon's  maxim,  determines  that  some  subsequent  act  is  necessary  to 
enable  "the  equitable  interest  to  prevail  against  a  legal  interest  made 
subsequently  bona  fide  acquired."  It  is  agreed  that  this  maxim  re- 
lates only  to  the  acquisition  of  a  legal  title  to  future  property.  It 
can  be  extended  to  equitable  rights  and  interests  (if  at  all)  merely  by 
analogy ;  but  in  thus  proposing  to  enlarge  the  sphere  of  the  rule,  it 
appears  to  me  that  sufficient  attention  has  not  been  paid  to  the  differ- 
ent effect  and  operation  of  agreements  relating  to  future  property  at 
law  and  in  equity.  At  law,  property,  non-existing,  but  to  be  acquired 
at  a  future  time,  is  not  assignable;  in  equity  it  is  so.  At  law  (as  we 
have  seen),  although  a  power  is  given  in  the  deed  of  assignment  to 
take  possession  of  after-acquired  property,  no  interest  is  transferred, 
even  as  between  the  parties  themselves,  unless  possession  is  actually 
taken ;  in  equity  it  is  not  disputed  that  the  moment  the  property  comes 
into  existence  the  agreement  operates  upon  it.     *     *     * 

But  if  it  should  still  be  thought  that  the  deed,  together  with  the  act 
of  bringing  the  machinery  on  the  premises,  was  not  sufficient  to  com- 
plete the  mortgagee's  title,  it  may  be  asked  what  more  could  have  been 
done  for  this  purpose?  The  trustee  could  not  take  possession  of  the 
new  machinery,  for  that  would  have  been  contrary  to  the  provisions 


SUBJECT-MATTER   OF   SALE  39 

of  the  deed  under  which  Taylor  was  to  remain  in  possession  until  de- 
fault in  payment  of  the  mortgage  money  after  a  demand  in  writing, 
or  until  interest  should  have  become  in  arrear  for  three  months;  and 
in  either  of  these  events  a  power  of  sale  of  the  machinery  might  be 
exercised.  And  if  the  intervenient  act  to  perfect  the  title  in  trust  be 
one  proceeding  from  the  mortgagor,  what  stronger  one  could  be  done 
by  him  than  the  fixing  and  placing  the  new  machinery  in  the  mill,  by 
which  it  became,  to  his  knowledge,  immediately  subject  to  the  opera- 
tion of  the  deed? 

I  asked  Mr,  Amphlett,  upon  the  second  argument,  what  novus  actus 
he  contended  to  be  necessary,  and  he  replied  "a  new  deed."  But  this 
would  be  inconsistent  with  the  terms  of  the  original  deed,  which  em- 
braces the  substituted  machinery,  and  which  certainly  was  operative 
upon  the  future  property  as  between  the  parties  themselves.  And  it 
seems  to  be  neither  a  convenient  nor  a  reasonable  view  of  the  rights 
acquired  under  the  deed  to  hold  that  for  any  separate  article  brought 
upon  the  mill  a  new  deed  was  necessary,  not  to  transfer  it  to  the 
mortgagee,  but  to  protect  it  against  the  legal  claims  of  third  persons. 

But  if  something  Was  still  requisite  to  be  done,  and  that  by  the  mort- 
gagor, I  cannot  help  thinking  that  the  account  delivered  by  Taylor  to 
the  mortgagees  of  the  old  machinery  sold,  and  of  the  new  machinery 
which  was  added  and  substituted,  was  a  sufficient  novus  actus  inter- 
veniens,  amounting  to  a  declaration  that  Taylor  held  the  new  machin- 
ery upon  the  trusts  of  the  deed. 

Lord  WenslEydale.  Mv  noble  and  learned  friend  will  forgive 
me,  but  that  was  not  mentioned  in  the  bill. 

Lord  CHELMSFORD.  My  noble  and  learned  friend  is  quite  correct 
in  that;  it  must  be  taken  that  that  was  not  mentioned  in  the  bill,  and 
that  was  the  answer  given  when  I  urged,  in  the  course  of  the  argu- 
ment, that  that  account  must  be  taken  to  be  a  sufficient  actus.  But 
still  I  am  stating  what  my  views  are  of  the  whole  case.  I  think  that 
the  account  delivered  by  Taylor  to  the  mortgagees  of  the  whole  ma- 
chinery which  was  added  and  substituted,  was  a  sufficient  novus  actus 
interveniens,  amounting  to  a  declaration  that  Taylor  held  the  new 
machinery  upon  the  trusts  of  the  deed,  the  only  act  which  could  be 
done  by  him  in  conformity  with  it;  and  it  is  difficult  to  understand 
for  what  other  rea  on  such  an  an-. unit  should  haw  been  rendered. 
As  between  then:  [uite  clear  that  a  new  deed  of  the  added 

and  sir  d  machinery  was  unnecessary.     No  possession  could  be 

delivered  of  it,  because  h  would  have  been  inconsistent  with  the 
incut  of  the  parties;  and  anything,  therefore,  beyond  this  r  tion 

of  the  morl  's  right,  appears  to  be  excluded  by  the  nature  of  the 

tran  a<  tion. 

1  will  add  a  very  few  ■  on  thi  •    I  of  the  notice  of  the  claim 

of  the  morl  i  the  judgmenl  creditor.    I  think  thai  the  equitable 

title  would  prevail  even  if  the  judgmenl  i       !  tor  had  no  notice  of  it, 

•rding  to  the  authorities    which   have  heen   alrcad\    observed   upon. 


40  FORMATION    OF    THE    CONTRACT 

It  is  true  that  Lord  Cottenham,  in  the  case  of  Metcalfe  v.  Archbishop 
of  York,  1  Mylne  &  C.  547,  555,  said  that  if  the  plaintiff,  in  that  case, 
was  entitled  to  the  charge  upon  the  vicarage  under  the  covenant  and 
charge  in  the  deed  of  1811,  "then,  at  the  defendants  had  notice  of 
that  deed  before  they  obtained  their  judgment,  such  charge  must  be 
preferred  to  that  judgment."  This  appears  to  imply  that  his  opinion 
was  that  if  the  judgment  creditor  had  not  had  notice,  he  would  have 
been  entitled  to  priority.  Much  stress,  however,  ought  not  to  be  laid 
upon  an  incidental  observation  of  this  kind,  where  notice  had  actually 
been  given,  and  where,  therefore,  the  case  was  deprived  of  any  such 
argument  in  favour  of  the  judgment  creditor.  If  Lord  Cottenham 
really  meant  to  say  that  notice,  by  the  judgment  creditor  of  the  prior 
equitable  title  was  necessary  in  order  to  render  it  available  against  him, 
his  opinion  is  opposed  to  the  decisions  which  have  established  that  a 
judgment  creditor,  with  or  without  notice,  must  take  the  property, 
subject  to  every  liability  under  which  the  debtor  held  it. 

The  present  case,  however,  meets  any  possible  difficulty  upon  the 
subject  of  notice,  because  it  appears  that  the  deed  was  registered  as 
a  bill  of  sale,  under  the  provisions  of  the  17  &  18  Vict.  c.  36.  It  was 
argued  that  this  act  was  intended  to  apply  to  bills  of  sale  of  actual 
existing  property  only,  and  it  probably  may  be  the  case  that  sales  of 
future  property  were  not  within  the  contemplation  of  the  legislature, 
but  there  is  no  ground  for  excluding  them  from  the  provisions  of  the 
act ;  and  upon  the  question  of  notice,  the  register  would  furnish  the 
same  information  of  the  dealing  with  future  as  with  existing  property, 
which  is  all  that  is  required  to  answer  the  objection. 

I  think  that  the  late  lord  chancellor  was  right  in  holding  that,  if 
actual  possession  of  the  machinery  in  question  before  the  sheriff's 
officer  entered  was  necessary,  there  was  no  proof  of  such  possession 
having  been  taken  on  behalf  of  the  mortgagee.  But  upon  a  careful 
consideration  of  the  whole  case,  I  am  compelled  to  differ  with  him 
upon  the  ground  on  which  he  ultimately  reversed  Vice  Chancellor 
Stuart's  decree.  I  think,  therefore,  that  his  decree  should  be  reversed, 
and  that  of  the  vice  chancellor  affirmed.     *     *     * 

Reversed. 


FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS  41 


FORMATION  OF  CONTRACT— UNDER  THE  STATUTE  OF 

FRAUDS 

I.  What  Contracts  are  Within  the  Statute  l 

1.  Contracts  for  Work,  Labor,  and  Materials 


LEE  v.  GRIFFIN. 

(Court  of  Queens  Bench,  1S61.    1  Best  &  S.  272.) 

Declaration  against  the  defendant,  as  the  executor  of  one  Frances 
P.,  for  goods  bargained  and  sold,  goods  sold  and  delivered,  and  for 
work  and  labour  done  and  materials  provided  by  the  plaintiff  as  a 
surgeon-dentist  for  the  said  Frances  P. 

Plea.    That  the  said  Frances  P.  never  was  indebted  as  alleged. 

The  action  was  brought  to  recover  the  sum  of  £21.  for  two  sets  of 
artificial  teeth  ordered  by  the  deceased. 

At  the  trial,  before  Crompton,  J.,  at  the  Sittings  for  Middlesex  after 
Michaelmas  Term,  1860,  it  was  proved  by  the  plaintiff  that  he  had,  in 
pursuance  of  an  order  from  the  deceased,  prepared  a  model  of  her 
mouth  and  made  two  sets  of  artificial  teeth ;  as  soon  as  they  were 
ready  he  wrote  a  letter  to  the  deceased,  requesting  her  to  appoint  a 
day  when  he  could  see  her  for  the  purpose  of  fitting  them.  To  this 
communication  the  deceased  replied  as  follows: 

"My  Dear  Sir :  I  regret,  after  your  kind  effort  to  oblige  me,  my 
health  will  prevent  my  taking  advantage  of  the  early  day.  I  fear  I 
may  not  be  able  for  some  days.  Yours,  &c.     Frances  P." 

Shortly  after  writing  the  above  letter,  Frances  P.  died.  On  these 
facts  the  defendant's  counsel  contended  that  the  plaintiff  ought  to  be 
nonsuited,  on  the  ground  that  there  was  no  evidence  of  a  dcli\ 
and  acceptance  of  the  goods  by  the  deceased,  nor  any  memorandum 
in  writing  of  a  contract  within  the  meaning  of  the  17th  section  of 
the  Statute  of  frauds,  29  Car.  2,  c.  3,  and  the  learned  judge  was  of 
that  opinion.  The  plaintiff's  counsel  then  contended  that,  on  the  au- 
thority of  Clay  v.  Yates,  1  H.  &  N.  73,  the  plaintiff  could  recover  in 
the  action  on  the  count  for  work  and  labour  done  and  materials 
provided.  The  learned  judge  declined  to  nonsuit,  and  directed  a 
verdict  for  the  amount  claimed  to  1"-  entered  for  the  plaintiff,  with 
leave  to  the  defendant  to  move  to  enter  a  nonsuit  or  verdict. 

Crompton,  J.  1  think  that  this  rule  ought  to  be  made  absolute. 
On  the  second  point  I  am  of  the  same  opinion  as  1  was  at  the  trial. 

i  For  d  on  of  prindp  Tiffany,  Bales  (2d  Ed.)  §§  1S-20. 


42  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

There  is  not  any  sufficient  memorandum  in  writing  of  a  contract  to 
satisfy  the  Statute  of  Frauds.  The  case  decided  in  the  House  of 
Lords,  to  which  reference  lias  been  made  during  »  the  argument,  is 
clearly  distinguishable.  That  case  only  decided  that  if  a  document, 
which  is  silent  as  to  the  particulars  of  a  contract,  refers  to  another 
document  which  contains  such  particulars,  parol  evidence  is  admissible 
for  the  purpose  of  showing  what  document  is  referred  to.  Assuming 
in  this  case,  that  the  two  documents  were  sufficiently  connected,  still 
there  would  not  be  any  sufficient  evidence  of  the  contract.  The  con- 
tract  in  question  was  to  deliver  some  particular  teeth  to  be  made  in  a 
particular  way,  but  these  letters  do  not  refer  to  any  particular  bar- 
gain, nor  in  any  manner  disclose  its  terms. 

The  main  question  which  arose  at  the  trial  was,  whether  the  contract 
in  the  second  count  could  be  treated  as  one  for  work  and  labour,  or 
whether  it  was  a  contract  for  goods  sold  and  delivered.  The  distinc- 
tion between  these  two  causes  of  action  is  sometimes  very  fine;  but, 
where  the  contract  is  for  a  chattel  to  be  made  and  delivered,  it  clearly 
is  a  contract  for  the  sale  of  goods.  There  are  some  cases  in  which 
the  supply  of  the  materials  is  ancillary  to  the  contract,  as  in  the  case 
of  a  printer  supplying  the  paper  on  which  a  book  is  printed.  In 
such  a  case  an  action  might  perhaps  be  brought  for  work  and  labour 
done,  and  materials  provided,  as  it  could  hardly  be  said  that  the  sub- 
ject-matter of  the  contract  was  the  sale  of  a  chattel:  perhaps  it  is 
more  in  the  nature  of  a  contract  merely  to  exercise  skill  and  labour. 
Clay  v.  Yates,  1  H.  &  N.  73,  turned  on  its  own  peculiar  circumstances. 
I  entertain  some  doubt  as  to  the  correctness  of  that  decision;  but 
I  certainly  do  not  agree  to  the  proposition  that  the  value  of  the  skill 
and  labour,  as  compared  to  that  of  the  material  supplied,  is  a  criterion 
by  which  to  decide  whether  the  contract  be  for  work  and  labour  or  for 
the  sale  of  a  chattel.  Here,  however,  the  subject-matter  of.  the  con- 
tract was  the  supply  of  goods.  The  case  bears  a  strong  resemblance 
to  that  of  a  tailor  supplying  a  coat,  the  measurement  of  the  mouth 
and  fitting  of  the  teeth  being  analogous  to  the  measurement  and  fitting 
of  the  garment. 

Hnjv,  J.  I  am  of  the  same  opinion.  I  think  that  the  decision  in 
Clay  v.  Yates,  1  H.  &  N.  73,  is  perfectly  right.  That  was  not  a  case 
in  which  a  party  ordered  a  chattel  of  another  which  was  afterwards 
to  be  made  and  delivered,  but  a  case  in  which  the  subject-matter  of 
the  contract  was  the  exercise  of  skill  and  labour.  Wherever  a  con- 
tract is  entered  into  for  the  manufacture  of  a  chattel,  there  the  subject- 
matter  of  the  contract  is  the  sale  and  delivery  of  the  chattel,  and  the 
party  supplying  it  cannot  recover  for  work  and  labour.  Atkinson  v. 
Bell,  8  B.  &  C.  277  (E.  C.  L.  R.  vol.  15),  is,  in  my  opinion,  good  law, 
with  the  exception  of  the  dictum  of  Bayley,  J.,  which  is  repudiated 
by  Maule,  J.,  in  Grafton  v.  Armitage,  2  C.  B.  339  (E.  C.  L.  R.  vol.  52), 
where  he  says:  "In  order  to  sustain  a  count  for  work  and  labour,  it 
is  not  necessary  that  the  work  and  labour  should  be  performed  upon 


WHAT   CONTRACTS   ARE   WITHIN   THE   STATUTE  i;>> 

materials  that  are  the  property  of  the  plaintiff."  And  Tindal,  C.  J., 
in  his  judgment  in  the  same  case,  p.  340,  points  out  that  in  the  applica- 
tion of  the  observations  of  Bayley,  J.,  regard  must  be  had  to  the 
particular  facts  of  the  case.  In  every  other  respect,  therefore,  the 
case  of  Atkinson  v.  Bell  is  law.  I  think  that  these  authorities  are  a 
complete  answer  to  the  point  taken  at  the  trial  on  behalf  of  the  plaintiff. 

When,  however,  the  facts  of  this  case  are  looked  at,  I  cannot  see 
how,  wholly  irrespective  of  the  question  arising  under  the  Statute  of 
Frauds,  this  action  can  be  maintained.  The  contract  entered  into  by 
the  plaintiff  with  the  deceased  was  to  supply  two  sets  of  teeth,  which 
were  to  be  made  for  her  and  fitted  to  her  mouth,  and  then  to  be  paid 
for.  Through  no  default  on  her  part,  she  having  died,  they  never 
were  fitted;   no  action  can  therefore  be  brought  by  the  plaintiff. 

Blackburn,  J.  On  the  second  point,  I  am  of  opinion  that  the  let- 
ter is  not  a  sufficient  memorandum  in  writing  to  take  the  case  out 
of  the  Statute  of  Frauds. 

On  the  other  point,  the  question  is  whether  the  contract  was  one 
for  the  sale  of  goods  or  for  work  and  labour.  I  think  that  in  all 
cases,  in  order  to  ascertain  whether  the  action  ought  to  be  brought  for 
goods  sold  and  delivered,  or  for  work  and  labour  done  and  materials 
provided,  we  must  look  at  the  particular  contract  entered  into  between 
the  parties.  If  the  contract  be  such  that,  when  carried  out,  it  would 
result  in  the  sale  of  a  chattel,  the  party  cannot  sue  for  work  and 
labour;  but,  if  the  result  of  the  contract  is  that  the  party  has  done 
work  and  labour  which  ends  in  nothing  that  can  become  the  subject 
of  a  sale,  the  party  cannot  sue  for  goods  sold  and  delivered.  The 
case  of  an  attorney  employed  to  prepare  a  deed  is  an  illustration  of 
this  latter  proposition.  It  cannot  be  said  that  the  paper  and  ink  he 
uses  in  the  preparation  of  the  deed  are  goods  sold  and  delivered. 
The  case  of  a  printer  printing  a  book  would  most  probably  fall  wi 
the  same  category.  In  Atkinson  v.  Bell,  8  B.  &  C.  277  (E.  C.  L.  R. 
vol.  15),  the  contract,  if  carried  out,  would  have  resulted  in  the 
of  a  chattel.  In  Grafton  v.  Armitage,  2  C.  B.  340  (E.  C.  L.  R.  vol. 
!.  C.  J.,  lays  down  this  very  principle.  He  draws  a  distinc- 
between  the  cases  of  Atkinson  v.  Bell  and  that  before  him.  The 
m  he  gives  is  that,  in  the  former  case,  "the  substance  of  the 
contract  v.  ids  to  be  sold  and  delivered  by  the  one  party  to  the 

other:"  in  the  latter  "there  never  was  any  intention  to  make  any- 
thing thai    COUld   properly  become   the  subjeel    of   an   action    foi 

sold  and  delivered."    I  think  il  tion  reconciles  those  twi 

and  th  m  of  Clay  v.  \  I    H.  &  N.  73,  is  not  inconsistent 

with  them.     In  the  pri  the  contract   was  to  deliver  a  thing 

which,  when  completed,  would  have  resulted  in  the  sale  of  a  chattel; 
in   oth.T   words,  the  Of    th"  contract    was    for   g  lOds  -old   and 

delivered.     I   do  not   think  th  l    the  te  I    to  apply  to  these  i 
whether  the  value  of  the  work  Is  thai  of  the  materials  u 

in  it  ution;    for,  if  a  sculptor  were  employed  ti  ute  a  work 


44  FORMATION    OF    CONTRACT STATUTE    OF    FRAUDS 

of  art,  greatly  as  his  skill  and  labour,  supposing  it  to  be  of  the  highest 
description,  might  exceed  the  value  of  the  marble  on  which  he  worked, 
the  contract  would,  in  my  opinion,  nevertheless  be  a  contract  for  the 
sale  of  a  chattel. 
Rule  absolute. 


BAGBY  v.  WALKER. 
(Court  of  Appeals  of  Maryland,  1893.     78  Md.  239,  27  Atl.  1033.) 

Two  actions — one  by  Arthur  M.  Walker  and  James  R.  Myers,  trad- 
ing as  Walker  &  Myers,  against  Charles  T.  Bagby  and  Arthur  D.  Riv- 
ers, trading  as  Bagby  &  Rivers ;  the  other  by  Bagby  &  Rivers  against 
Walker  &  Myers.  Judgment  for  Walker  &  Myers.  Bagby  &  Rivers 
appeal. 

McSherry,  J.  The  only  questions  involved  in  the  two  cases 
now  before  us  arise  on  the  single  exception  reserved  to  the  rulings  of 
the  superior  court  of  Baltimore  on  several  prayers  for  instructions  to 
the  jury.  There  were  two  actions  between  the  same  parties,  tried  at  the 
same  time  in  the  court  below.  In  one,  Walker  &  Myers,  the  appellees  . 
here,  were  plaintiffs,  and  the  appellants  were  defendants ;  in  the  other, 
Bagby  &  Rivers,  the  appellants  here,  were  plaintiffs,  and  the  appellees 
were  defendants.  In  the  first,  Walker  &  Myers  sued  to  recover  the 
balance  due  upon  the  contract  price  of  certain  lumber  sold  and  deliv- 
ered by  them  to  Bagby  &  Rivers,  and  also  to  recover  the  difference  be- 
tween the  contract  price  and  the  market  price  of  certain  other  lumber 
subsequently  ordered,  but  which  Bagby  &  Rivers  refused  to  accept.  A 
judgment  was  entered  in  favor  of  the  plaintiffs.  In  the  second  case, 
Bagby  &  Rivers  sued  to  recover  damages  for  a  failure  on  the  part  of 
Walker  &  Myers  to  deliver  the  kind  and  quality  of  lumber  stipulated 
for,  and  also  for  a  failure  to  deliver  within  the  time  designated  in  the 
agreement  a  large  part  of  the  lumber  sold  by  them  to  Bagby  &  Rivers.' 
A  judgment  of  non  pros,  was  entered  in  the  case. 

The  contract  is  embodied  in  a  letter  from  Bagby  &  Rivers  to  Walker 
&  Myers  under  date  of  January  29,  1891,  and  a  written  acceptance  of 
the  terms  by  Walker  &  Myers  on  the  same  date.  The  time  limited  for 
filling  the  order  was  three  months.  The  first  delivery  under  this  writ- 
ten contract,  about  the  execution  of  which  there  is  no  dispute,  was 
made  in  the  following  March,  and  the  last  on  November  27th  of  the 
same  year,  long  after  the  expiration  of  the  three-months  limit.  The 
price  of  the  lumber  actually  delivered  amounted  to  $1,635.38,  and  the 
payments  made  thereon,  beginning  in  April  and  ending  in  August, 
aggregated  $1,137.98,  leaving  an  unpaid  balance  of  $497.70.  There 
was  evidence  in  the  case  tending  to  prove  that  Bagby  &  Rivers  had 
waived  the  requirement  of  time  mentioned  in  the  letter  of  January  29, 
1891,  as  to  the  delivery  of  the  lumber.    Walker  &  Myers  offered  other 


<a 


WHAT   CONTRACTS   ARE   WITHIN   THE   STATUTE  45 

evidence,  tending  to  prove  that  in  the  latter  part  of  November  they,  at 
the  request  and  upon  a  verbal  order  of  Bagby  &  Rivers,  cut  and  ship- 
ped to  Baltimore  other  lumber,  in  addition  to  that  specified  in  the  con- 
tract, at  a  price  agreed  upon  between  them,  which  lumber  they  offered 
to  Bagby  &  Rivers  in  two  lots  in  January  and  March,  1892,  but  that 
Bagby  &  Rivers  refused  to  receive  it,  and  that  Walker  &  Myers  lost 
by  those  refusals  $179.20,  that  sum  being  the  difference  between  the 
price  agreed  upon  and  the  market  price  when  the  deliveries  were  ten- 
dered. Bagby  &  Rivers  denied  giving  the  order  for  this  additional 
lumber.  The  lumber  was  cut  by  Walker  &  Myers  at  their  mills  in 
North  Carolina  for  the  purpose  of  filling  these  two  orders,  and  was 
transported  to  Baltimore,  where  it  was  unloaded  on  the  wharves  of 
Walker  &  Myers,  from  whence  all  of  it,  except  the  two  lots  which 
Bagby  &  Rivers  refused  to  take,  was  hauled  by  Bagby  &  Rivers,  after 
being  inspected  by  them,  to  their  furniture  factory. 

Upon  these  facts  the  court  instructed  the  jury  at  the  instance  of 
Walker  &  Myers  that,  notwithstanding  the  mention  in  the  letter  of 
January,  1891,  of  the  period  of  three  months  as  the  limit  within  which 
the  lumber  was  to  be  furnished,  still,  if  the  jury  should  find  that  Bagby 
&  Rivers  waived  that  requirement,  and  accepted  and  hauled  lumber 
from  the  plaintiffs'  wharves  until  November  27,  1891,  then  the  defend- 
ants would  not  be  entitled  to  recoup  against  the  plaintiffs'  claim  any 
damages  sustained  by  the  defendants  by  reason  of  the  failure  of  the 
plaintiffs  to  deliver  the  lumber  within  the  time  stipulated.  Further, 
that  if  the  defendants  ordered  other  lumber,  that  the  plaintiffs  cut  it 
upon  that  order,  and  offered  it  to  the  defendants  at  the  usual  place  of 
delivery;  that  it  was  of  the  quality  ordered;  and  that  the  defendants 
refused  to  take  it,  and  pay  for  it, — then  the  plaintiffs  would  be  entitled 
to  recover  damages  for  that  refusal.  This  was  Walker  &  Myers'  third 
prayer.  And,  finally,  that  under  the  last  preceding  inst ruction  the 
measure  of  damages  would  be  the  difference  between  the  price  agreed 
upon  and  the  market  price  in  Baltimore  at  the  dates  when  the  lumber 
should  have  been  accepted. 

Mere  acceptance  of  the  lumber  after  the  expiration  of  the  time  fixed 
in  the  agreement  for  its  delivery  was  not  of  itself  a  waiver  of  the 
breach  committed  by  the  failure  to  deliver  it  according  to  the  terms  of 
the  contract;  nor  did  such  an  acceptance  preclude  the  vendees  from 
subsequently  suing  to  recover  the  damages  resulting  to  them  by  reason 
of  the  nondelivery  from  the  time  of  default  up  to  the  date  of  accept- 
ance; nor  from  recouping,  when  sued  by  the  vendors,  those  dam. 
against  the  latter's  claim  for  the  purchase  money.  Central  Trust  Co. 
v.  Arctic  Ice  Mach.  Manuf'g  Co.,  77  Md.  202,  26  Ail.  493.  The  in 
struction  d<  I  question  these  principles.     It  does  nol  proceed  upon 

the  theory  thai  acceptance  after  a  refusal  to  deliver  within  the  stipu 
lated- time  is  of  itself,  without  more,  equivalent  to  a  waiver  of  the  time 
for  delivery,  but  distinctly  leaves  t"  the  jury  to  find  from  the  evidence 


46  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

in  the  case  whether,  as  an  independent  fact,  Bagby  &  Rivers  waived 
the  requirement  that  the  lumber  should  he  furnished  within  three 
months.  If  they  did  waive  that  requirement,  they  could  not  subse- 
quently found  an  action  upon  its  nonperformance,  nor  rely  thereon  by 
way  of  recoupment.  If  they  condoned  the  breach,  they  cannot  after- 
wards base  a  claim  for  damages  upon  it.  There  was  evidence  before 
the  jury  to  the  effect  that  Bagby  &  Rivers  had  waived  the  requirement 
of  lime  mentioned  in  the  letter  of  January  29,  1891,  and  no  special  ex- 
ception was  taken  to  the  prayer  upon  the  ground  that  there  was  no 
evidence  in  the  cause  to  support  it.  It  is  a  mistake  to  suppose  that 
the  prayer  is  founded  upon  the  assumption  that  a  mere  acceptance  of 
i he  lumber  was  tantamount  to  a  waiver  of  the  time  for  delivery,  and 
there  is  nothing  in  the  structure  of  the  prayer  at  all  calculated  to  mis- 
lead the  jury  to  such  a  conclusion.  There  was,  in  our  opinion,  no 
error  committed  by  the  granting  of  it. 

The  two  remaining  instructions  given  at  the  instance  of  Walker  & 
Myers  relate  to  the  lumber  which  Bagby  &  Rivers  refused  to  receive. 
There  were  three  objections  suggested  to  the  first  of  these  two  instruc- 
tions, which  is  the  third  prayer  of  Walker  &  Myers;  and  these  are: 
First,  that  the  instruction  makes  reference  to  the  facts  stated  in  an 
antecedent  prayer,  which  was  rejected,  and  which  was  consequently 
not  before  the  jury;  second,  that  the  contract  upon  which  it  permits 
a  recovery  is  void  under  the  seventeenth  section  of  the  statute  of 
frauds ;  and,  third,  that,  no  time  having  been  named  in  the  verbal 
contract  for  the  delivery  of  lumber  under  it,  a  reasonable  time  was  im- 
plied by  law,  and  the  finding  of  what  was  a  reasonable  time  should 
have  been  left  to  the  jury. 

The  first  objection  is  not  a  substantial  one.  A  reference  to  the  facts 
stated  in  the  rejected  prayer  was  wholly  superfluous.  Eliminating  that 
reference  altogether  in  no  way  affected  the  integrity  of  the  instruction. 
Its  remaining  in  the  instruction  could  not  possibly  have  misled  or  con- 
fused the  jury,  and  obviously  did  not  prejudice  or  injure  the  appellants. 

The  second  objection,  though  more  plausible,  is  not  more  tenable. 
While  the  seventeenth  section  of  the  statute  of  frauds  (29  Car.  II.,  c.  3) 
declares  all  contracts  for  the  sale  of  goods,  wares,  and  merchandise  for 
the  price  of  £10  and  upwards  to  be  invalid  unless  part  of  the  goods 
be  accepted,  or  part  of  the  price  be  paid,  or  something  be  given  in 
earnest  to  bind  the  bargain,  or  some  note  or  memorandum  in  writing 
be  signed  by  the  party  to  be  charged,  still  from  a  very  early  period  it 
has  heen  the  settled  law  of  Maryland,  where  the  Statute  of  Charles  has 
always  been  in  force,  that  when  work  and  labor  are  to  be  bestowed  by 
the  vendor  upon  the  article  sold  before  it  is  to  be  delivered  the  con- 
tract is  not  within  the  statute,  (Eichelberger  v.  McCauley,  5  Har.  & 
J.  213,  9  Am.  Dec.  514;  Rentch  v.  Long,  27  Md.  188;)  and  the  reason 
is  that  when  work  and  labor  are  necessary  to  prepare  an  article  for 
delivery  the  work  and  labor  to  be  done  by  the  vendor  form  part  of  the 


WHAT   CONTRACTS   ARE    WITHIN    THE   STATUTE 


47 


consideration  of  the  contract,  and,  as  these  are  not  within  the  statute, 
the  sale  is  not  a  sale  of  goods,  wares,  and  merchandise,  within  the 
meaning  of  the  seventeenth  section  of  29  Car.  11.,  c.  3.  Xow,  the 
proof  snows  that  when  the  alleged  verbal  order  was  given  shortly  after 
November  29,  1891,  for  this  additional  lumber,  it  was  necessary  for 
Walker  &  Myers  to  have  the  lumber  cut  or  prepared  for  delivery, — 
to  put  it  in  a  condition  different  from  that  in  which  it  was  at  the  time 
the  contract  was  made.  This  circumstance  took  the  contract  out  of  the 
operation  of  the  statute. 

The  third  objection  to  the  instruction  is,  though  narrow,  substantial 
and  fatal.    Xo  time  was  fixed  in  the  alleged  verbal  contract  of  Novem- 
ber, 1891,  for  the  delivery  of  the  lumber  under  it.    The  law  in  all  such 
instances  prescribes  a  reasonable  time,  (Kriete  v.  Myer,  61  Md.  558;) 
and  it  is  for  the  jury,  under  all  the  circumstances  of  the  case,  to  de- 
termine what  is  a  reasonable  time,  (Buddie  v.  Green,  3  Hurl.  &  X. 
906;    Bryam  v.  Gordon,  11  Mich.  531;    Pinney  v.  Railroad  Co.,  19 
Minn.  251    [Gil.  211;]     Stange  v.  Wilson,   17  Mich.  342;    Kriete  v. 
.Mver,  61  Md.  558.)    But  this  instruction  submitted  no  such  question  to 
the  jury.     The  proof  showed  that  Walker  &  Myers  tendered  delivery 
of  this  lumber   in  two  lots. — one  on  January  2d,   and  the  other  on 
March  22.   1892;    but  whether  these  were  within  a  reasonable  time, 
under  all  the  circumstances  of  the  case,  was  not  only  not  left  to  the 
jury  to  determine,  but  was  in  effect  decided  by  the  court.    The  instruc- 
tion assumed  that  the  offers  to  deliver  were  made  within  a  reasonable 
time,  for  it  left  to  the  jury  to  find  that  the  order  for  the  lumber  was 
given  ;   that  the  lumber  was  cut ;  that  it  was  offered  to  Bagby  &  Rivers 
at  the  usual  place  of  delivery;    that  its  quality  was  such  as  had  been 
specified,  and  that  the  defendants  refused  to  accept  it;    and  then  in- 
structed them  that  upon  the  finding  of  these  facts  the  plaintiffs  were 
entitled  to  recover.    But  the  time  when  the  offer  to  deliver  was  made, 
which  was  a  necessary  element  of  the  plaintiff's  case,  was  entirely  ig- 
nored.    Whether  the  offer  had  been  made  within  a  reasonable  time  or 
not  was  exclusively  for  the  jury  to  say,  but  it  was  not  submitted  to 
them.     The  instruction,  by  directing  a  verdict  for  the  plaintiffs  upon 
the  finding  of  the  facts  above  stated,  necessarily  assumed  that  the  of- 
fers to  deliver  had  been  made  within  a  reasonable  time,  because,  Ui 
the  offers  to  deliver  had  be<  n  made  within  a  reasonable  time,  the  plain- 
tiffs had  no  right  to  re  :over  at  all.     But  it  was  not  within  the  province 
of  the  court  to  assume  or  to  decide  that  question,  and,  as  a  conse 
quence,  the  instruction  in  which  that  was  done  w;  ous. 

The  r<  maining  prayer  granted  upon  the  request  of  Walker  &  Myers 

to  the  measure  of  damagi     for  the  1  of  Bagby  &  Rivers 

t<»  receive  the  luml  er  offered  to  them  in  January  and  March,  1892,  and 

rectly  states  the  law  on  thai  subject.     Pinckney  v.  Dambmann,  72 

Mil.  i  I    ),    But,  inasmuch  as  this  instruction  was  dependent 

upon  and  a  mere  corollary  from  the  preceding  erroneous  instruction, 


48  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

though  correct  as  an  abstract  proposition,  there  was  error  in  granting 
it.  Had  the  previous  instruction  been  right,  this  one  would  have  been 
properly  given. 

The  superior  court  rejected  the  first  and  fourth  prayers  presented 
by  Bagby  &  Rivers,  and  these  prayers  raise  the  only  other  questions 
open  for  review.  The  fourth  prayer  was  very  properly  abandoned  in 
the  argument,  and  we  need  therefore  give  to  it  no  consideration.  The 
first  prayer  of  Bagby  &  Rivers  asked  the  court  to  say  to  the  jury  that 
if  they  should  find  that  Bagby  &  Rivers  were  induced  to  receive  the 
lumber  by  false  representations  knowingly  made  by  Walker  &  Myers 
as  to  its  quality  and  condition,  then  Bagby  &  Rivers  would  not  be 
bound  by  any  inspection  made  by  them  of  the  lumber.  We  need  only 
say,  in  disposing  of  this  prayer,  that  there  is  no  evidence  in  the  record 
to  show  that  Walker  &  Myers  knowingly  made  any  false  representa- 
tions as  to  the  quality  and  condition  of  the  lumber,  and  that,  therefore, 
it  would  have  been  improper  to  allow  the  jury  to  speculate  upon  that 
subject,  as  they  must  have  done  had  this  prayer  been  granted. 

It  follows  from  the  views  we  have  expressed  that  there  was  no 
error  committed  by  the  court  in  its  rulings  in  the  case  of  Bagby  & 
Rivers  against  Walker  &  Myers,  and  its  judgment  of  non  pros,  in  that 
case  will  be  affirmed.  It  also  follows  that,  as  there  was  error  commit- 
ted in  granting  the  third  and  fourth  prayers  presented  by  Walker  & 
Myers,  the  judgment  in  the  case  of  Walker  &  Myers  against  Bagby  & 
Rivers  must  be  reversed,  and  a  new  trial  will  be  awarded. 

Judgment  in  No.  35  reversed,  with  costs  above  and  below,  and  new 
trial  awarded.  Judgment  in  No.  36  affirmed,  with  costs  above  and  be- 
low. 


HEINTZ  v.  BURKHARD. 

(Supreme  Court  of  Oregon,  1896.    29  Or.  55,  43  Pac.  866,  31  L.  R.  A.  508, 

54  Am.  St.  Rep.  777.) 

Action  by  A.  R.  Heintz  &  Co.  against  Joseph  Burkhard.  From  a 
judgment  of  nonsuit,  plaintiffs  appeal. 

Bean,  C.  J.  This  action  was  brought  to  recover  damages  for  the 
breach  of  a  contract  to  furnish  the  ironwork  for  defendant's  building, 
and  comes  here  on  an  appeal  from  a  judgment  of  nonsuit.  For  the 
purposes  of  this  appeal,  it  is  sufficient  to  say  that  the  evidence  tended 
to  show  that  in  August,  1894,  the  plaintiff  and  defendant  entered  into 
an  oral  contract,  by  the  terms  of  which  the  plaintiff  was  to  manufac- 
ture, and  furnish  to  the  defendant,  the  ironwork  for  a  brick  building 
about  to  be  erected  by  him,  according  to  certain  plans  and  specifica- 
tions, for  the  sum  of  $2,825,  but  that  defendant  subsequently,  and  be- 
fore any  work  was  performed,  wrongfully  refused  to  allow  plaintiff  to 
proceed  with  the  execution  of  its  contract.    The  ironwork  referred  to 


WHAT   CONTRACTS   ARE    WITHIN   THE   STATUTE  49 

was  not  to  be  of  the  kind  manufactured  by  the  plaintiff  in  the  usual 
course  of  business,  or  for  the  trade,  but  of  special  designs  and  meas- 
urements, suitable  only  for  use  in  the  construction  of  defendant's 
building.  The  court  below  ruled  that  the  contract  was  "an  agreement 
for  the  sale  of  personal  property,"  within  the  meaning  of  subdivision 
5,  §  785,  of  Hill's  Annotated  Laws,  and  void  because  not  in  writing, 
and  this  ruling  presents  the  only  question  to  be  determined  on  this 
appeal. 

To  determine  whether  a  given  contract  concerning  personal  prop- 
erty, which  does  not  exist  in  specie  at  the  time  it  is  entered  into,  but 
must  be  manufactured  and  brought  into  being  under  the  contract, 
comes  within  the  statute  of  frauds,  is  not  without  difficulty,  and  the 
decisions  are  by  no  means  reconcilable.  The  chief  difficulty  in  all  such 
cases  is  encountered  in  determining  when  the  contract  is  substantially 
for  the  sale  of  personal  property,  to  be  executed  in  the  future,  and 
when  for  work  and  labor  and  material  only.  If  the  former,  it  is  within 
the  statute.  If  the  latter,  it  is  not.  Thus  far  the  authorities,  except  in 
the  state  of  New  York,  are  substantially  agreed ;  but  there  have  been 
numerous  decisions,  and  much  diversity  and  even  conflict  of  opinion, 
in  relation  to  a  proper  rule  by  which  to  determine  whether  a  contract 
is  in  fact  for  the  sale  of  personal  property,  and  therefore  within  the 
statute,  or  for  work  and  labor  and  material  furnished,  and  so  without 
the  statute. 

There  appear  to  be  substantially  three  distinct  views  upon  the  stat- 
ute, which,  for  convenience,  are  generally  designated  as  the  Eng- 
lish, the  New  York,  and  the  Massachusetts  rules,  as  represented  by  the 
decisions  of  their  respective  courts.  In  England,  after  a  long  series 
of  cases  in  which  various  tests  have  been  suggested  the  rule  seems  to 
have  been  settled  in  Lee  v.  Griffin,  1  Best  &  S.  272,  that  "if  the  con- 
tract be  such  that,  when  carried  out,  it  would  result  in  the  sale  of  a 
chattel,  the  party  cannot  sue  for  work  and  labor ;  but,  if  the  result 
of  the  contract  is  that  the  party  has  done  work  and  labor  which  ends 
in  nothing  that  can  become  the  subject  of  a  sale,  the  party  cannot  sue 
for  goods  sold  and  delivered."  In  that  case  the  action  was  brought 
by  a  dentist  to  recover  £21.  for  two  sets  of  artificial  teeth  made  for 
the  defendant's  testatrix.  The  court  held  the  contract  to  be  for  the 
sale  of  chattels,  and  within  the  statute.  But  this  decision  seems  to 
stand  alone,  and  i  in  direct  conflict  with  the  previous  decisions  of  the 
English  courts.    Towers  v.  (  ;  .1  Strange,  506;   Clayton  v.  An 

4  Burrows,  2101;  Rondeau  v.  Wyatt,  2  II.  Bl.  63;  Cooper 
v.  Elston,  7  Term  R.  II;  Groves  v.  Buck,  3  Maule  &  S.  178;  Garbutt 
v.  Watson,  5  Barn.  &  Aid.  613;  Smith  v.  Surman,  9  Barn.  &  C.  574. 
Tt  is  said  to  hav<-  been  the  resull  of  Lord  Tenterden's  act,  which  ex- 
sly  extended  the  statute  to  all  contracts  of  sale,  notwithstanding 
the  goods  "may  nol  at  the  time  of  su<  h  contract  be  actually  made,  pro- 
oli  r  Cases  Salj    —4 


50  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

cured  or  produced  or  fit  or  ready  for  delivery,  or  some  act  may  be 
required  for  the  making  or  completing  thereof  to  render  the  same 
tit  for  delivery."  Meincke  v.  Falk,  55  Wis.  432,  13  N.  W.  545,  42 
Am.  Rep.  722;  Benj.  Sales  (6th  Ed.)  108. 

In  this  condition  of  the  English  authorities,  we  are  not  prepared 
to  go  to  the  full  extent  of  Lee  v.  Griffin.  It  is  an  extreme  case,  and, 
unless  the  decision  was  made  to  conform  to  Lord  Tenterdeirs  act,  it 
antagonizes  the  opinions  of  some  of  the  most  eminent  jurists  of  Eng- 
land, and  is  open  to  the  objection  that  it  practically  permits  the  fraud 
which  theoretically  the  statute  seeks  to  prevent.  To  say  that  a  con- 
tract of  a  dentist  to  manufacture  and  furnish  a  set  of  false  teeth  for 
his  customer  is  "an  agreement  for  the  sale  of  personal  property,"  with- 
in the  meaning  of  the  statute,  is  certainly  giving  it  the  widest  possible 
operation,  and  has  not  found  general  recognition  in  this  country,  as  a 
correct  exposition  of  the  doctrine,  although  the  simplicity  of  the  rule 
has  commended  it  to  many  of  the  judges. 

In  New  York  the  rule  prevails  that  a  contract  concerning  personal 
property  not  existing  in  solido  at  the  time  of  the  contract,  but  which 
the  vendor  is  to  manufacture  or  put  in  condition  for  delivery,  such  as 
the  woodwork  for  a  wagon,  or  wheat  not  yet  threshed,  or  nails-  to  be 
made  from  iron  belonging  to  the  manufacturer,  and  the  like,  is  not 
within  the  statute.  Crookshank  v.  Burrell,  18  Johns.  58,  9  Am.  Dec. 
187;  Downs  v.  Ross,  23  Wend.  270;  Sewall  v.  Fitch,  8  Cow.  215; 
Parsons  v.  Loucks,  48  N.  Y.  17,  8  Am.  Rep.  517;  Cooke  v.  Millard, 
65  N.  Y.  352,  22  Am.  Rep.  619;  Higgins  v.  Murray,  73  N.  Y.  252. 
But  this  rule  seems  to  be  peculiar  to  that  state. 

By  the  Massachusetts  rule  the  test  is  not  the  existence  or  nonexist- 
ence of  the  commodity  at  the  time  of  the  contract,  as  in  New  York, 
or  whether  the  contract  will  ultimately  result  in  the  transfer  of  the 
title  of  a  chattel  from  the  vendor  to  the  vendee,  as  in  England,  but 
whether  the  article  is  such  as  the  manufacturer  ordinarily  produces  in 
the  course  of  business,  and  for  the  trade,  or  as  the  result  of  a  special 
order,  and  for  special  purposes.  If  the  former,  it  is  regarded  as  a  con- 
tract of  sale,  and  within  the  statute.  If  the  latter,  it  is  held  to  be  essen- 
tially a  contract  for  labor  and  material,  and  therefore  not  within  the 
statute.  Thus,  it  is  held  that  an  agreement  to  build  a  carriage  of  a  cer- 
tain design  is  not  within  the  statute  (Mixer  v.  Howarth,  21  Pick. 
[Mass.]  205,  32  Am.  Dec.  256)  but  that  a  contract  to  buy  a  certain 
number  of  boxes  of  candles  at  a  fixed  price,  which  the  vendor  said  he 
would  thereafter  finish  and  deliver,  is  a  contract  of  sale,  to  which  the 
statute  applies.  Gardner  v.  Joy,  9  Mete.  (Mass.)  177.  The  result  of 
the  decisions  in  that  state  has  recently  been  stated  thus :  "A  contract 
for  the  sale  of  articles  then  existing,  or  such  as  the  vendor,  in  the  ordi- 
nary course  of  his  business,  manufactures  or  procures  for  the  general 
market,  whether  on  hand  at  the  time  or  not,  is  a  contract  for  the  sale 
of  goods,  to  which  the  statute  applies.     But,  on  the  other  hand,  if  the 


WHAT   COXTKACTS   ARE   WITHIN   THE   STATUTE  51 

goods  arc  to  be  manufactured  especially  for  the  purchaser,  and  upon 
his  special  order,  and  not  for  the  general  market,  the  case  is  not  with- 
in the  statute."  Ames,  J.,  in  Goddard  v.  Binney,  115  Mass.  450,  15 
Am.  Rep.  112.  And  this  doctrine  seems  to  be  the  one  most  widely 
adopted  in  this  country. 

As  to  the  latter  part  of  the  rule,  relating  to  goods  made  on  special 
orders,  there  is  little  if  any  conflict  in  the  American  cases.  Baker, 
Sales,  §  96;  2  Schouler,  Pers.  Prop.  §  443;  Brown,  St.  Frauds,  § 
30S;  8  Am.  &  Eng.  Enc.  Law,  707;  note  to  Flynn  v.  Dougherty,  14 
L.  R.  A.  230  (Cal.)  27  Pac.  1080;  Meincke  v.  Falk,  55  Wis.  427,  13 
X.  W.  545,  42  Am.  Rep.  722;  Finney  v.  Apgar,  31  N.  J.  Law,  266; 
Phipps  v.  McFarlane,  3  Minn.  109  (Gil.  61),  74  Am.  Dec.  743;  Flight 
v.  Ripley,  19  Me.  137;  Cason  v.  Cheely,  6  Ga.  554;  Abbott  v.  Gil- 
christ, 3S  Me.  260.  Until  legislation  shall  assert  itself  more  positively, 
the  courts  are  put  to  their  election  as  between  these  three  rules,  which, 
though  each  has  its  own  merits,  are  not  to  be  reconciled  with  one  an- 
other. In  the  absence  of  a  statute  substantially  the  same  as  Lord  Ten- 
terden's  act,  we  are  unwilling  to  go  to  the  extent  of  the  doctrine  of  Lee 
v.  Griffin ;  and  in  this  case  it  is  unnecessary  for  us  to  give  a  preference 
to  either  the  New  York  or  Massachusetts  rule,  because  the  contract 
in  question  is  valid  under  either.  It  would  be  excluded  from  the  op- 
eration of  the  statute  by  the  rule  adopted  in  New  York,  because  the 
subject-matter  of  the  contract  did  not  exist  in  solido,  or  at  all,  at  the 
time  it  was  made;  and  it  is  not  within  the  statute  under  the  Massachu- 
setts rule  and  the  generally  accepted  American  doctrine,  because  the 
ironwork  was  to  be  manufactured  especially  for  the  defendant,  and 
upon  his  special  order,  according  to  a  particular  design,  and  was  not 
such  as  the  plaintiffs,  in  the  ordinary  course  of  their  business,  manu- 
factured for  the  general  trade. 

It  fallows  that  under  either  view  the  court  below  was  in  error  in 
holding  that  the  contract  was  void  because  not  in  writing.  The  judg- 
ment must  therefore  be  reversed,  and  a  new  trial  ordered. 


2.  Contract  fob  ResalS 


JOHNSTON  v.  TRASK. 

(Court  of  Appeals  of  New  York,  L889.     in;  \.  v.  L36,  22  N.  E.  .177.  6  L.  R. 

A.  630,    L5  Am.  St.    Rep.  -•:'■' I  I 

Appeal  from  a  judgment  of  the  general  term  of  the  third  depart- 
,t,  entered  on  a  verdict  directed  ;it  circuit   in  favor  of  the  plain- 
tiff.    Since  January,   1882,  the   defendants  have   been   bankei 
brokers,   doing  busim       as   partners  under  a   firm   name.     On   the 


«")2  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

trial  of  the  issues,  the  plaintiff  testified  that  on  the  18th  clay  of  Jan- 
uary, 1882,  the  managing  partner  of  the  firm,  at  its  place  of  business, 
orally  agreed  with  the  plaintiff  to  purchase  for  him,  if  they  could  be 
bought  in  the  market,  income  mortgage  bonds  of  the  Ohio  Central 
Railroad  of  the  par  value  of  $10,000,  "and,  any  time  you  want  to  get 
rid  of  them,  we  will  take  them  off  your  hands  at  what  they  cost  you." 
Later  in  the  day,  the  defendants  reported  to  the  plaintiff  that  they 
had  purchased  the  bonds  for  $4,800,  and  that  their  commissions  were 
$12.50;  and  thereupon  the  plaintiff  paid  $1,000  towards  the  purchase 
price.  The  bonds  were  retained  by  the  defendants  as  security  for 
the  sums  due  from  the  plaintiff  to  them  until  November  16,  1882, 
when  the  plaintiff  paid  the  full  purchase  price  for  the  bonds,  commis- 
sions, and  interest,  and  took  them  into  his  possession.  The  market 
price  of  the  bonds  declined  until  April  28,  1884,  when  they  were 
selling  for  about  10  cents  on  a  dollar.  On  this  date  the  plaintiff 
tendered  the  bonds  to  the  defendants,  and  demanded  that  they  pay 
him  $4,812.50,  which  they  refused  to  do;  and  April  30,  1884,  this 
action  was  brought,  on  contract,  to  recover  that  sum.  The  defend- 
ants did  not  contradict  the  plaintiff's  evidence,  which  was  corroborat- 
ed by  three  witnesses ;  but  at  the  close  of  his  case  they  moved  for 
a  nonsuit  on  the  grounds — First.  That  the  oral  contract  was  void 
for  not  complying  with  the  following  section  of  the  statute  of  frauds : 
"Sec.  3.  Every  contract  for  the  sale  of  any  goods,  chattels,  or  things 
in  action,  for  the  price  of  fifty  dollars  or  more,  shall  be  void,  unless 
(1)  a  note  or  memorandum  of  such  contract  be  made  in  writing, 
and  be  subscribed  by  the  parties  to  be  charged  thereby ;  or  (2)  unless 
the  buyer  shall  accept  and  receive  part  of  such  goods,  or  the  evi- 
dences, or  some  of  them,  of  such  things  in  action;  or  (3)  unless  the 
buyer  shall,  at  the  time,  pay  some  part  of  the  purchase  money." 
Second.  That  the  evidence  was  insufficient  to  sustain  the  conclusion 
that  the  managing  partner  had  authority  to  bind  the  firm  by  such  a 
contract.  Third.  That  the  plaintiff  did  not  tender  the  bonds,  and 
demand  the  repayment  of  the  price,  within  a  reasonable  time,  and 
thereby  lost  his  right  of  action.  The  motion  was  denied,  and,  the 
defendant  not  asking  to  have  any  question  submitted  to  the  jury,  a 
verdict  was  directed  in  favor  of  the  plaintiff  for  $4,800,  with  interest 
thereon  from  April  28,  1884.  A  judgment  was  entered  on  the  ver- 
dict, which  was  affirmed  by  the  general  term.2 

FoliXTT,  C.  J.,  (after  stating  the  facts  as  above.)  An  oral  con- 
tract by  which  a  person  sells  his  own  chattels  or  choses  in  action 
for  more  than  $50,  payment  and  delivery  being  made,  and  agrees  to 
take  them  back  from,  and  repay  the  purchase  price  to,  the  purchaser 
on  demand,  is  an  entire  contract;  and  the  promise  to  take  back  the 
property,  and  repay  the  purchase  price,  is  not  void  by  the  third  sec- 
tion of  the  statute  of  frauds.     Wooster  v.  Sage,  67  N.  Y.  67]  Fitz- 

2  See  40  Hun,  415. 


WHAT   CONTRACTS   ARE    WITHIN   THE   STATUTE  53 

patrick  v.  Woodruff,  96  N.  Y.  561;  White  v.  Knapp,  47  Barb.  549; 
Williams  v.  Burgess,  10  Adol.  &  E.  499;  Fay  v.  Wheeler,  44  Vt. 
292;  Dickinson  v.  Dickinson,  29  Conn.  600;  1  Benj.  Sales,  (Corbin's 
Ed.)  §  169.  Executed  contracts  of  sale,  embracing  a  promise  by 
vendors  of  chattels  that  in  case  they  do  not  suit  the  purchaser,  or  do 
not  possess  certain  specified  qualities,  the  vendor  will  repay  to  the 
vendee  the  purchase  price  upon  their  return,  have  been  frequently 
considered  by  the  courts,  (Towers  v.  Barrett,  1  Term  R.  133 ;  Thorn- 
ton v.  Wynn,  12  Wheat.  183,  6  L.  Ed.  595)  but  no  case  has  been 
cited  holding  that  such  a  promise  on  the  part  of  a  vendor  is  an  in- 
dependent contract.  When  an  agent,  by  an  oral  contract,  sells  and 
delivers  the  goods  of  a  disclosed  principal,  his  personal  oral  war- 
ranty of  quality  is  not  a  contract  independent  of  the  contract  of  sale, 
but  is  a  part  of  it,  and  one  consideration  is  sufficient  to  support  the 
sale  and  warranty.  The  oral  contract  of  the  defendants  that  they 
would  purchase  for  the  plaintiff  in  the  market,  at  market  rates,  the 
bonds,  for  the  usual  compensation,  and  in  case  he  should  thereafter 
become  dissatisfied  with  the  bonds,  that  they  would,  on  demand,  take 
them  off  his  hands  at  what  they  cost  him,  was  a  single  contract. 
Under  this  contract,  the  bonds  were  purchased  and  held  by  the  de- 
fendants until  the  purchase  price  and  their  commissions  were  paid, 
and  then  they  delivered  the  bonds  to  the  plaintiff.  The  promise  of 
the  defendants  that  they  would  take  the  bonds  off  the  plaintiff's 
hands  at  what  they  cost  him,  upon  request,  is  not  a  contract  for  the 
sale  of  goods,  chattels,  or  things  in  action,  within  the  third  section 
of  the  statute  of  frauds,  but  is  a  provision  for  the  rescission  of  the 
entire  contract,  and  is  valid. 

The  learned  counsel  for  the  appellant,  in  support  of  his  conten- 
tion, cites  Hagar  v.  King,  38  Barb.  200.  In  that  case  a  firm  was 
indebted  to  the  plaintiffs  in  the  action  for  work  performed  in  con- 
structing part  of  a  railroad.  The  defendant,  who  was  one  of  the 
firm,  asked  the  plaintiffs  to  take  from  the  railroad  corporation  its 
bonds  in  payment  of  the  debt,  orally  agreeing  with  the  plaintiffs,  for 
himself,  that,  if  they  would  so  take  the  bonds,  he  (not  the  firm)  would, 
within  10  days,  take  the  bonds  from  and  pay  to  the  plaintiffs  the 
amount  of  the  firm's  debt.  The  plaintiffs  assented  to  the  proposal. 
Afterwards  they  accepted  from  the  corporation  its  due-hill  for  the 
amount  due  them  for  their  work,  payable  in  the  bonds  of  the  cor- 
ition,  and  gave  a  receipt  for  all  of  their  demands  for  work  done 
on  the  road.  The  plaintiffs  then  indorsed  the  due  hill,  delivered  it  to 
the  corporation,  and  received  tin-  bonds.  Within  10  days  the  plain 
tendered  the  bonds  to  the  defendant,  and  demanded  the  amount 
for  which  they  were  taken  in  payment.  It  wax  held  that  the  oral 
agreement  embraced  two  contracts,  on.-  in  accept  the  bonds  in 
payment  of  the  debt,  and  another  to  purchase  the  bonds  at  a  future 
day  at  a  given  price,  and  that  the  latter  contract  was  within  lli' 
third  section  of  the  statute  of  fraud-,  and  void.     That  case  is  easil) 


54  FORMATION    OF    CONTRACT STATUTE    OF    FRAUDS 

distinguishable  from  the  one  at  bar.  The  defendant  in  that  case, 
an  individual,  was  not  indebted  to  the  plaintiffs  and  his  individual 
contract  to  take  back  the  bunds  was  held  to  be  distinct  from  the  con- 
tract by  which  the  firm's  debt  was  paid  in  the  manner  described. 

Was  the  evidence  sufficient  to  sustain  the  conclusion  that  the  man- 
aging partner  was  authorized  to  make  the  contract  in  behalf  of  the 
firm?  The  defendants  admitted,  in  their  answer,  that  they  were 
bankers  and  brokers,  and  that  they  entered  into  that  part  of  the  con- 
tract by  which  they  agreed  to  purchase  the  bonds  for  the  plaintiff, 
which,  by  their  concession,  was  within  the  ordinary  business  of  the 
firm.  But  they  neither  averred  in  their  answer,  nor  gave  evidence 
tending  to  show,  that  the  promise  to  take  back  the  bonds  was  be- 
yond the  scope  of  their  business.  There  being  no  evidence  which 
shows  that  the  transaction  was  actually  beyond  the  scope  of  the 
business  of  the  firm,  the  question  arises  whether  it  was  apparently 
beyond  the  scope  of  its  business.  Bank  v.  Underhill,  102  N.  Y.  336, 
7  N.  E.  293.  The  case  .shows  that,  in  addition  to  the  business  usual- 
ly done  by  bankers  and  brokers,  the  defendants  were  accustomed  to 
purchase  and  carry  securities  on  margins  for  their  customers.  The 
undisputed  evidence  is  that  the  managing  partner  did  make  the  prom- 
ise upon  which  the  plaintiff  recovered ;  thus  asserting  his  authority 
to  make  it  in  the  name  and  in  behalf  of  the  firm.  No  evidence  is 
found  in  the  record  which  would  justify  the  court  in  holding,  as  a 
matter  of  law,  that  the  promise  upon  which  the  action  was  brought 
was  so  far  beyond  the  scope  of  the  business  of  the  firm  that  the 
plaintiff  had  no  right  to  rely  upon  it.  The  evidence  was  sufficient 
to  cast  upon  the  defendants  the  burden  of  rebutting  the  presumption 
arising  from  the  evidence  and  the  pleadings,  and,  they  having  failed 
to  do  this,  no  error  was  committed  in  refusing  to  nonsuit  on  the 
ground  that  the  managing  partner  had  no  authority  to  bind  the  firm 
by  this  contract. 

The  third  ground  upon  which  a  nonsuit  was  asked  for  is  not  sup- 
ported by  the  evidence.  The  undisputed  evidence  is  that  the  man- 
aging partner  of  the  firm,  on  several  occasions,  advised  the  plaintiff 
not  to  part  with  the  bonds,  assured  him  that  they  were  good,  and 
would  ultimately  advance  in  the  market.  Under  these  circumstances 
the  plaintiff  was  not  guilty  of  laches  in  not  earlier  returning  the 
bonds,  and  demanding  the  price  paid.  Wooster  v.  Sage,  supra.  The 
judgment  should  be  affirmed,  with  costs.     All  concur. 


WHAT   ARE   GOODS,  WARES   AND   MERCHANDISE  53 

II.  What  Are  Goods,  Wares  and  Merchandise  3 
1.  Incorporeal  Property 


GREENWOOD  v.  LAW. 

(Court  of  Errors  and  Appeals  of  Now  Jersey,  1893.    55  N.  J.  Law,  1GS,  26  Atl. 

134,  19  L.  R.  A.  6SS.) 

Action  by  George  Law  against  Francis  Greenwood  to  recover 
damages  for  the  refusal  of  defendant  to  execute  a  parol  agreement 
to  assign  a  mortgage  to  plaintiff.  A  motion  to  nonsuit  plaintiff  was 
denied,  and  defendant  brings  error. 

Van  Syckel,  J.  Law,  the  plaintiff  below,  gave  to  Greenwood, 
the  defendant,  a  mortgage  upon  lands  in  this  state  for  the  sum  of 
$3,700.  Law  alleged  that  Greenwood  entered  into  a  parol  agreement 
with  him  to  assign  him  this  mortgage  for  the  sum  of  $3,000,  and 
brought  this  suit  to  recover  damages  for  the  refusal  of  Greenwood 
to  execute  said  parol  agreement.  On  the  trial  below  a  motion  was 
made  to  nonsuit  the  plaintiff  on  the  ground  that  the  alleged  agree- 
ment was  within  the  statute  of  frauds.  The  refusal  of  the  trial  court 
to  grant  this  motion  is  assigned  for  error. 

Lord  Chief  Justice  Denman,  in  Humble  v.  Mitchell,  reported  in 
11  Adol.  &  E.  205,  and  decided  in  1840,  said  that  no  case  directly  in 
point  on  this  subject  had  been  found,  and  he  held  that  shares  in  an 
incorporated  company  were  not  goods,  wares,  and  merchandise, 
within  the  seventeenth  section  of  the  statute  of  frauds.  He  over- 
looked the  cases  of  Mussell  v.  Cooke,  reported  in  Finch,  Prec. 
533,  (decided  in  1720,)  and  Crull  v.  Dodson,  reported  in  2  Eq.  Cas. 
Abr.  51,  c.  28,  Sel.  Cas.  Ch.  41,  (decided  in  1725,)  in  which  the  con- 
trary view  was  taken.  In  the  case  of  Pickering  v.  Appleby,  Comyn, 
354,  iln-  question  was  fully  argued  before  the  12  judges,  who  were 
equally  divided  upon  it.  The  cases  decided  in  the  English  courts 
since  1840  have  followed  Humble  v.  Mitchell.  They  will  be  found 
collected  in  Benj.  Sales  (Ed.  1888,)  in  a  note  on  page  106. 

In  this  country  a  different   rule  prevails   in   most    of  the  states. 

In  Baldwin  v.  Williams,  3  Mete.  (Mass.)  365,  a  parol  contract  for  the 

Sale   of   a    promissory    note    was    held    to    be    within    the    statute.      In 

I       necticul  and   Maine  a  contracl  for  the  sale  of  shares  in  a  joint- 

1.  company  is  required  to  be  in  writing.     North  v.    Forest,   15 

v.  Mitchell,  60  Me.  430     Chief  Justice  Shaw,  after 

a  full  discussion  of  I  bjeel  in  Tisdale  v.  Harris,  20  Pick.  (Mass.) 

oncludes  thai  a  contracl  for  the  sale  of  shares  in  a  manufacturing 

rporation   is   a  contracl    for   the   sale    of   goods   or   merchandise 

i  Ford!  m    Ion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  |§  21  22. 


5G  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

within  the  statute  of  frauds,  and,  in  the  absence  of  the  other  requisites 
of  the  statute,  must  be  proved  by  some  note  or  memorandum  in 
writing,  signed  by  the  party  to  be  charged  or  his  agent.  He  did  not 
regard  the  argument  that  by  necessary  implication  the  statute  ap- 
plies only  to  goods  of  which  part  may  be  delivered  as  worthy  of 
much  consideration.  An  animal  is  not  susceptible  of  part  delivery, 
yet  undoubtedly  the  sale  of  a  horse  by  parol  is  within  the  statute. 
The  exception  in  the  statute  is  when  part  is  delivered ;  but,  if  there 
cannot  be  a  delivery  in  part,  the  exception  cannot  exist  to  take  the 
case  out  of  the  general  prohibition. 

Bonds  and  mortgages  were  expressly  held  to  be  goods  and  chat- 
tels in  Terhune  v.  Bray's  Ex'rs,  16  N.  J.  Law,  53.  That  was  an  ac- 
tion of  trover  for  a  bond  and  mortgage.  Chief  Justice  Hornblower, 
in  deciding  the  case,  said  that,  although  the  attachment  act  and  let- 
ters of  administration  .seem  to  distinguish  between  rights  and  cred- 
its and  goods  and  chattels,  and  although  an  execution  against  the 
latter  will  not  reach  bonds  and  notes,  yet  there  is  a  sense  in  which, 
upon  sound  legal  principles,  such  securities  are  goods  and  chattels. 
This  sense  ought  to  be  applied  to  these  words  in  this  case.  Reason 
and  sound  policy  require  that  contracts  in  respect  to  securities  for 
money  should  be  subject  to  the  reasonable  restrictions  provided  by 
the  statute  to  prevent  frauds  in  the  sale  of  other  personal  property. 
The  words,  "goods,  wares,  and  merchandise,"  in  the  sixth  section  of 
the  statute,  are  equivalent  to  the  term  "personal  property,"  and  are 
intended  to  include  whatever  is  not  embraced  by  the  phrase  "lands, 
tenements,  and  hereditaments"  in  the  preceding  section.  In  my 
judgment,  the  contract  sued  upon  is  within  the  statute  of  frauds,  and 
it  was  error  in  the  court  below  to  refuse  to  nonsuit. 


2.  Interest  in  Land — Fourth  Section  of  the  Statute 


STUART  v.  PENNIS. 
(Supreme  Court  of  Appeals  of  Virginia,  1S95.    91  Va.  6S8,  22  S.  E.  509.) 

RiELY,  J.  This  was  a  suit  in  equity  to  compel  the  specific  per- 
formance of  a  contract  in  writing  for  the  sale  of  growing  timber 
trees.    Upon  a  demurrer  to  the  bill,  it  was  dismissed  by  the  court. 

There  was,  and  could  be,  no  objection  urged  against  the  relief  sought, 
growing  out  of  any  indefiniteness  as  to  the  terms  of  the  contract,  or 
as  to  its  subject-matter.  The  defense  of  the  appellee  was  that  the 
subject  of  the  contract  was  personal  property,  and  not  an  interest  in 
real  estate;  and  being  personal  property,  and  there  also  being  an  ade- 
quate remedy  at  law  for  the  breach  of  the  contract,  a  court  of  equity 


WHAT   ARE    GOODS,  WARES   AND   MERCHANDISE  U  • 

would  not  specifically  enforce  it.  On  the  other  hand,  counsel  for 
the  appellant  claimed  that  standing  trees  so  pertain  to  the  soil  that 
a  contract  for  their  sale  is,  in  law,  a  sale  of  an  interest  in  land,  and 
that  under  the  general  rule  that  a  court  of  equity  will  always  enforce, 
in  a  proper  case,  the  specific  performance  of  a  contract  for  the  sale 
of  land  (2  Minor,  Inst.  867;  Pom.  Spec.  Perf.  §  10),  such  relief  should 
have  been  granted  in  this  case. 

We  have  been  cited  by  counsel  to  no  decision  of  this  court  on  this 
subject,  and  are  ourselves  aware  of  none.  Our  attention  was  called 
to  the  case  of  McCoy  v.  Herbert,  36  Va.  (9  Leigh)  548,  33  Am.  Dec. 
256,  but  an  examination  of  it  shows  that  the  question  in  controversy 
here  was  not  there  raised  or  decided.  The  sole  question  there  was  as  to 
the  validity  of  an  assignment  of  a  contract  of  sale  of  certain  trees 
standing  in  the  woods,  which  had  been  bought  for  ship  timber,  and 
not  whether  the  subject  of  the  contract  was  an  interest  in  land  or 
chattels.  There  is  scarcely  any  other  subject  upon  which  there  is  so 
great  diversity  of  judicial  decision.  Whenever  required  to  pronounce 
upon  a  contract  for  their  sale,  courts  have  seemed  uncertain  as  to 
whether  standing  or  growing  trees  should  be  classed  as  real  or  personal 
property.  Not  only  have  the  courts  of  different  jurisdictions  decided 
differently,  but  the  decisions  of  the  same  court  within  the  same  juris- 
diction have  not  always  been  uniform.  Particularly  has  this  been 
the  case  with  the  courts  of  England,  and  their  latest  declaration  on 
this  question  (Marshall  v.  Green,  1  C.  P.  Div.  35)  has  not  escaped  criti- 
cism from  very  high  authority.  Hirth  v.  Graham,  50  Ohio  St.  57,  33 
N.  E.  90,  19  L.  R.  A.  721,  40  Am.  St.  Rep.  641 ;  Benj.  Sales  (Ed. 
1892)  §  126,  and  article  by  Prof.  Washburn  (the  learned  author  of 
the  work  on  Real  Property)  published  in  the  Albany  Law  Journal,  and 
to  be  found  in  the  note  to  the  case  of  Punier  v.  Piercy,  17  Am.  Rep. 
595. 

The  decisions  of  the  highest  courts  in  the  several  states  of  the 
Union  have  also  been  greatly  at  variance  with  respect  to  this  subject. 
It  will  be  found,  however,  upon  an  examination  of  them,  that  the 
weight  of  authority  preponderates  in  favor  of  the  view  that  a  contract 
for  the  sale  of  growing  trees  is  a  contract  for  the  sale  of  an  interest 
in  land,  and  is  to  be  so  treated.  Hirth  v.  Graham,  supra;  Owens  v. 
Lewis,  46  [nd.  488,  15  Am.  Rep.  295;  Green  v.  Armstrong,  1  Denio, 
550;  Slocumv.  Seymour,  36  N.  J.  Law,  138,  13  Am.  Rep.  432;  Kings- 
Icy  v.  Holbrook,  45  N.  II.  313,  86  Am.  Dec.  173;  Buck  v.  Pickwell, 
27  Vt.  157;  Harrell  v.  Miller,  35  Miss.  700,  72  Am.  Dec.  154;  Bish. 
Cont.  §  1294;  and  Wa  hb.  Real  Prop.  366,  367. 

Land   includes  everything  belonging  or  attached  to  it,  above  and 
below  tli-'  surface.     In  include    the  minerals  buried  in  its  depths,  or 
which  crop  oul  of  its  surface.    It  equally  includes  the  woods  and  trei 
growing  upon  it.     Rooted  and  standing  in  the  soil,  and  drawing  their 
support  from  it,  they  are  regarded  as  an  integral  part  of  the  land. 

just  as  the  coal,   the   iron,    the  gypsum,  and   the  building  stone   which 


58  FORMATION    OF    CONTRACT STATUTE    OF    FRAUDS 

enter  so  largely  into  the  business  of  commerce.  Attached  to  the  soil, 
they  pass  with  the  land,  as  a  part  of  it.  A  conveyance  of  the  land 
carries  with  it  to  the  grantee  the  right  to  the  forests  and  trees  growing 
upon  it.  In  the  dealings  of  men,  growing  timber  is  ever  regarded  as 
a  part  of  the  realty.  Upon  the  death  of  the  ancestor,  they  pass  with 
it  to  his  devisee,  or  descend  with  it  to  his  heir,  and  not  to  his  executor 
or  administrator.  They  are  not  treated  as  personalty.  They  are  not 
subject  to  levy  and  sale  under  execution.  And  so,  upon  principle, 
sound  reason,  and  authority,  we  are  of  opinion  that  they  constitute 
an  interest  in,  or  are  a  part  of,  the  land,  and  must  be  so  treated  by 
the  courts. 

We  are  the  better  satisfied  with  the  conclusion  reached,  in  that 
it  has  the  merit  of  being  easily  understood  and  readily  applied,  not 
only  to  this  particular  industry,  but  to  the  many  other  useful,  varied, 
and  boundless  natural  products  of  a  similar  kind,  of  the  section  of 
the  state  whence  this  case  comes,  in  whose  development  its  people 
are  becoming  more  largely  engaged  year  by  year.  But  if  the  contract 
was  not  to  be  treated  as  the  sale  of  an  interest  in  land,  of  which 
it  is  as  much  a  matter  of  course  for  a  court  of  equity  to  decree  a 
specific  performance  as  it  is  for  a  court  of  law  to  give  damages  for 
the  breach  of  it,  we  are  nevertheless  of  the  opinion  that  it  would  be 
a  proper  case  for  the  enforcement  of  the  contract.  While  the  doc- 
trine is  well  established  that  a  court  of  equity  will  not,  in  general, 
decree  the  specific  performance  of  contracts  relating  to  chattels,  yet 
it  will  do  so  where  the  remedy  at  law  is  inadequate  to  meet  all  the 
requirements  of  a  given  case,  and  to  do  complete  justice  between  the 
parties. 

The  true  equity  rule  is  thus  laid  down  by  Story's  Equity  Juris- 
prudence (section  33) :  "The  remedy  must  be  plain,  for,  if  it  be  doubt- 
ful and  obscure  at  law,  equity  will  assert  a  jurisdiction.  It  must  be 
adequate,  for,  if  at  law  it  fall  short  of  what  the  party  is  entitled  to, 
that  founds  a  jurisdiction  in  equity.  And  it  must  be  complete ;  that 
is,  it  must  attain  the  full  end  and  justice  of  the  case.  It  must  reach 
the  whole  mischief,  and  secure  the  whole  right  of  the  party,  in  a  per- 
fect manner,  at  the  present  time,  and  in  future ;  otherwise  equity  will 
interfere,  and  give  such  relief  and  aid  as  the  exigency  of  the  partic- 
ular case  may  require." 

The  remedy  at  law  would  fall  short,  in  the  case  at  bar,  of  measur- 
ing up  to  this  rule.  The  vendee  had  the  right,  if  he  chose  to  exercise 
it,  to  let  the  trees  remain  standing  upon  the  land  for  a  period  of  three 
years.  Where  the  fulfillment  or  execution  of  a  contract  may  extend 
through  several  years,  it  would  be  difficult  to  estimate  the  damages. 
His  profits,  depending  in  such  case  on  future  events,  could  not  be 
estimated  in  present  damages  without  being  largely  conjectural.  As 
is  said  by  Pomeroy  in  his  book  on  Contracts  (section  15),  "to  compel 
a  party  to  accept  damages  under  such  circumstances  is  to  compel  him 
to  sell  his  possible  profits  at  a  price  depending  on  a  mere  guess  " 


ACCEPTANCE   AND    EECEirT  59 

Then,  again,  the  trees  included  within  the  body  of  land  described 
in  the  contract,  and  bought  by  the  appellant,  have  not  been  marked  or 
counted,  and  he  has  been  forbidden  by  the  appellee  to  mark  or  disturb 
them.  He  has  no  way  of  ascertaining  their  number  but  by  going  on 
the  land,  and  marking  and  counting  them.  After  being  forbidden  to 
do  this,  he  is  without  the  means  of  ascertaining  the  number  of  the 
different  kinds  of  trees  purchased;  and,  without  knowing  their  num- 
ber, it  is  not  possible  to  ascertain  his  damages.  The  remedy  at  law 
in  this  case  would  clearly  be  neither  adequate  nor  complete. 

For  the  foregoing  reasons,  we  are  of  opinion  that  the  court  erred 
in  sustaining  the  demurrer  to  the  bill,  and  the  decree  complained  of 
must  be  reversed. 


III.  Acceptance  and  Receipt* 

1.  Acceptance 


TOMPKINS  v.  SHEEHAN. 

(Court  of  Appeals  of  New  York,  1S99.     15S  N.  Y.  617,  53  N.  E.  502.) 

Action  by  Hiram  Tompkins  against  Cornelius  Sheehan.  A  verdict 
and  judgment  were  rendered  for  plaintiff,  and  defendant  appealed 
to  the  appellate  division,  which  affirmed  the  judgment  (40  N.  Y.  Supp. 
1150),  and  defendant  again  appeals. 

Gkay,  J.6    The  plaintiff  has  sought  by  this  action  to  recover  of 
the  defendant  the  purchase  price  of  200  shares  of  the  capital  stock 
of  the  Congress  Springs  Company,  which,  in  his  complaint,  he  alleges 
to  have  been  included  in  a  sale  of  1 ,9S5  shares  to  the  defendant,  as 
ted    for  the  several  owners  through  the  agency  of  one  of  their 
number.     It  is  therein   further  averred  that  the  agreement   with   re- 
t  to  the  sale  of  the  1,985  shares  was  that  it  should  be  condition!  d 
Upon  the  defendant's  purchasing  and  paying  for  the  whole  thereof 
at  the  price  fixed,  and  that,  in  pursuance  of  the  agreement,  1,785  share  i 
were  delivered  to,  and   paid   for  by,  the  defendant;    but  that,  by  rea- 
son of  the  plaintiff's  certificate  having  been  mislaid,  his  shares  were 
not  included  at  the  time  of  the  delivery.    The  defendant,  by  his  an 
r,  admitted  the  purchase  of  the  1,785  shares  of  stock,  but  den     - 
the  allegation    of  the  complainl  relating  to  the-  plaintiff's  shares;   an  1 
a  further  defense,  alleged  the  invalidity  of  the  agreement  referred 
to  in  i!i'-  nit  under  the  statute  of  frauds. 

The  circumstan*  developed  upon  the  trial  with  respect  to  tin, 

controversy,  showed  that  in  February,  L890,  a  block  of  1,935  shares 

<  Pop  disctu  Ion  of  principles,  Tiffany,  Sales  (2d  Ed.)  |§  24  31, 

o  The  dissenting  opinion  "i  Bartlett,  J.,  is  omitted. 


00  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

of  the  stock  in  question  was  purchased  from  one  Hotchkiss  by  five- 
persons,  of  whom  the  plaintiff  was  one.  The  purchase  would  appear 
to  have  been  made  at  the  instance  or  suggestion  of  the  defendant, 
who  soon  thereafter,  through  the  controlling  interest  of  this  holding,, 
was  able  to  elect  his  own  board  of  directors,  and  to  become  the  pres- 
ident of  the  company.  The  1,985  shares  were  registered  upon  the 
books  of  the  company  in  the  names  of  the  five  persons  by  whom  they 
had  been  bought,  in  the  several  amounts  to  which  their  interests  in 
the  purchase  entitled  them.  Subsequently,  and  in  December  of  the 
same  year,  the  defendant  through  a  lawyer,  approached  Mr.  Bockes, 
who  held  496  of  the  1,985  shares,  with  the  proposition  to  buy  the  whole 
block  of  stock.  Bockes  communicated  directly  with  all  of  the  holders 
of  the  shares,  except  the  plaintiff,  who  was  at  the  time  in  Chicago, 
and  received  their  consent  to  a  sale  at  the  price  which  they  had 
paid  for  them,  with  interest  at  the  legal  rate  added  to  the  date  of  de- 
livery. Mr.  Bockes  telegraphed  to  the  plaintiff,  and  testified  that  he 
received  a  reply  assenting  to  the  sale  of  his  shares.  That  telegram 
appears  to  have  been  lost,  and  the  only  one  produced  by  the  plaintiff 
was  sent  the  day  after  the  shares  of  the  other  four  persons  had  been 
delivered  to  the  defendant.  On  a  certain  day  in  December,  Mr.  Bockes 
delivered  to  the  defendant,  and  received  from  him  the  agreed  price  for, 
1,785  shares.  He  had  not  received  the  plaintiff's  certificate  of  stock 
before  the  closing  of  the  transaction  with  the  defendant,  by  reason 
of  its  not  having  been  found;  and,  when  he  did  receive  it  a  few  days 
later,  he  left  it  at  the  office  of  the  defendant's  attorney,  where  it 
remained  for  some  time,  before  he  returned  it  to  the  plaintiff,  by 
reason  of  the  defendant's  refusal  to  consider  it  as  included  in  his 
purchase   of   the    stock. 

On  behalf  of  the  plaintiff,  the  evidence  went  to  show  that  the  sale 
was  expressly  conditioned  upon  the  1,985  shares  being  sold  as  an  en- 
tirety, and  that  the  defendant  agreed  to  that  arrangement.  On  the 
part  of  the  defendant,  the  evidence  was  that  the  plaintiff's  shares 
were  not  included  in  the  transaction;  the  defendant's  testimony  and; 
that  of  his  attorney  contradicting  explicitly  the  testimony  given  for 
the  plaintiff,  and  denying  that  there  was  any  other  arrangement  en- 
tered into  than  one  for  the  purchase  of  the  1,785  shares.  The  issue 
of  fact,  as  to  what  the  agreement  was  between  Mr.  Bockes,  acting  for 
himself  and  the  other  holders  of  the  Hotchkiss  stock,  and  the  defend- 
ant, was  submitted  to  the  jury,  who  found  in  favor  of  the  plaintiff. 
It  was  the  view  of  the  trial  judge,  and  he  so  instructed  the  jury,  that, 
if  the  agreement  was  to  purchase  1,985  shares  of  stock,  the  plaintiff's 
200  shares  being  included  in  that  number,  and  the  delivery  to  the  de- 
fendant was  made  with  the  understanding  that  the  plaintiff's  shares 
were  to  be  delivered  as  part  of  the  entire  purchase  of  1,985  shares, 
the  case  would  be  taken  out  of  the  operation  of  the  statute  of  frauds. 
Exceptions  were  taken  to  the  charge  in  this  respect,  as  they  had  also 
been  taken  to  the  refusal  of  the  trial  judge  to  dismiss  the  complaint  for 


ACCEPTANCE   AND   RECEIPT  CI 

the  invalidity,  under  the  statute  of  frauds,  of  the  alleged  parol  agree- 
ment for  the  sale  or  purchase  of  the  plaintiff's  shares  of  stock. 

The  question  of  law  which  is  thus  presented  is  sought  to  he  met 
and  answered  by  the  plaintiff,  who  is  respondent  here,  upon  the  ground 
that  it  was  proved,  and  found  as  a  fact  by  the  jury,  that  the  con- 
tract of  sale  was  the  joint  contract  of  the  plaintiff  and  the  four  other 
persons  who,  with  him,  had  become  the  owners  of  the  Hotchkiss 
shares.  That  being  the  fact  established  by  the  verdict,  he  argues  that 
the  delivery  of  a  part  of  the  shares  made  the  contract  valid  under  the 
statute  of  frauds.  In  our  opinion,  however,  the  facts  of  this  case 
were  not  such  as  to  prevent  the  operation  of  the  statute,  which  pro- 
vides that  every  contract  for  the  sale  of  any  goods,  chattels,  or  things 
in  action,  for  the  price  of  $50  or  more,  shall  be  void,  unless  a  note 
or  memorandum  be  made  in  writing  and  subscribed  by  the  parties  to 
be  charged  thereby;  or  unless  there  be  acceptance  by  the  buyer,  in 
whole  or  in  part,  or  a  part  payment  of  the  purchase  money.  2  Rev. 
St.  p.  136,  §  3.  Whatever  the  understanding  or  agreement  between 
the  plaintiff  and  his  associates  with  respect  to  the  Hotchkiss  shares, 
in  the  purchase  of  which  they  had  combined,  it  is  undisputed  that 
that  stock  was  divided  up  between  them,  and  thereafter  held  in  sever- 
alty; each  one  becoming  the  separate  and  registered  holder  of  the 
shares  allotted  to  him.  When  it  was  proposed  by  the  defendant  to 
purchase  these  shares,  there  was  no  agreement,  nor  any  memorandum 
in  writing  concerning  it,  between  him  and  Mr.  Bockes,  as  representing 
the  five  owners  of  the  stock.  There  was  none  between  the  stockholders 
themselves,  affecting  their  ownership.  They  were,  as  between  them- 
selves, as  they  were' to  the  world,  the  separate  owners  of  the  shares 
standing  in  their  names,  and  there  was  nothing  in  the  transaction  con- 
ducted by  Mr.  Bockes  for  a  sale  of  the  stock  which  legally  bound  them 
to  it. 

The  mere  fact  (which  must  be  deemed  to  have  been  established  by 
the  verdict)  that  the  defendant  had  agreed  with  Mr.  Bockes  to  buy 
all  of  the  1,985  shares  would  not  make  it  any  the  less  as  to  e 
stockholder  a  separate  transaction,  which  he  might  elect  to  carry  out 
if  he  chose.  There  was  not  such  an  agency  in  Mr.  Bockes  as  would 
have  been  effectual  to  bind  his  associates,  and  certainly  nothing  so 
far  as  this  plaintiff  is  concerned,  beyond  his  telegraphic  expression  of 
a  willingness  to  sell  his  stock,  if  the  other  owners  would  sell.  The 
separati  of  interest  in  the  transaction  is  illustrated  in  this  very 

action,  which  is  commenced  by  the  plaintiff  alone  to  recover  as  for 
of  his  own  slock.     It  is  the  distinct  and  several  ownership 
.  which  interposesa  difficulty  in  the  way  of  the  plaintiff's 
ry  that  is  not  to  be  overcome  by  the  finding  of  the  jury  that  the 
actual  agreement  of  the  defendanl  wa    to  buy  all  of  these  shares.    The 
cardinal  purpose  of  the  statute  of  frauds  was  to  lessen  the  opportu- 
nities for  the  perpetration  of  fraud  by  compelling  the  parties  to  put 

their  agreements  in  writing,  when  their  Iran  arii,, ns  involve  more  than 


G2  FORMATION    OF    CONTRACT STATUTE    OF    FRAUDS 

a  certain  pecuniary  value;  but  it  recognized  that  an  incontestable  fact 
might  equally  establish  what  the  agreement  between  them  was,  and 
therefore  provided  that  acceptance,  or  a  part  payment,  would  be  suffi- 
cient, and  would  obviate  the  necessity  for  the  production  of  some  writ- 
ten evidence. 

The  provisions  of  the  statute  of  frauds  may  not  be  availed  of  to 
effectuate  a  fraudulent  purpose;  and,  where  that  is  clearly  seen  to 
be  the  case,  it  not  infrequently  has  happened  that  the  court  has  found 
a  way  to  afford  the  relief  when  an  equitable  consideration  of  the  facts 
would  warrant.  But  this  is  no  such  case.  The  question  is  purely  one 
whether  this  plaintiff  shall  recover  from  the  defendant  under  an  alleged 
agreement  on  his  part  to  buy  200  shares  of  stock,  which  he  denies, 
when  the  evidence  as  to  its  making  rests  in  parol  and  is  irreconcilably 
conflicting.  Under  the  circumstances,  there  is  no  legal  reason  why 
the  defendant  may  not  insist  upon  his  strict  legal  rights  under  the  stat- 
ute of  frauds.  It  is  the  plaintiff's  misfortune  that  the  matter  of  the 
sale  of  his  stock  rests  in  parol,  as  it  was,  also,  his  misfortune,  upon 
his  version  of  the  facts,  that  his  certificate  of  stock  could  not  be  found 
in  time  to  be  delivered  with  the  certificates  of  the  other  stockholders. 
It  is  a  misfortune  for  which  no  legal  remedy  is  available,  and  the  case 
may  be  said,  not  inaptly,  to  illustrate  that  precise  situation  between 
the  parties  to  a  transaction  which  the  statute  was  intended  to  apply  to 
and  to  provide  for. 

The  judgment  appealed  from  should  be  reversed,  and  a  new  trial 
ordered,  with  costs  to  abide  the  event. 


2.  Actual.  Receipt 


DORSEY  v.   PIKE. 

(Supreme  Court  of  New  York,  General  Term,  1S89.    50  Hun,  534,  3  N.  Y. 

Supp.  730.) 

Action  by  James  Dorsey  against  Rosella  E.  Pike  for  the  price  of 
machinery  sold.  Defendant  appeals  from  a  judgment  entered  on  a  ver- 
dict for  plaintiff,  and  from  an  order  denying  a  motion  for  a  new  trial. 

Bradley,  J.  The  action  was  brought  to  recover  the  price  of  an 
engine,  boiler,  and  pump,  with  appendages,  alleged  to  have  been  sold 
and  delivered  by  the  plaintiff  to  the  defendant,  and  to  have  been 
purchased  by  her.  The  latter  denied  the  sale  and  purchase.  It  ap- 
pears that  the  defendant  was  the  owner  of  a  stone-quarry,  in  which 
she  was  engaged  in  quarrying  stone  for  market ;  and  that  early  in 
July,  1886,  James  B.  Pike,  the  husband  of  the  defendant,  rented  of 
the  plaintiff  this  apparatus,  to  use  in  working  the  quarry,  and  it  was 
put  in  use  there  for  drilling  and  pumping.     The  plaintiff  claimed,  and 


ACCEPTANCE    AND    RECEIPT 


G3 


gave  evidence  tending  to  prove,  that  in  the  forepart  of  the  following 
August  an  agreement  was  made  between  him  and  the  husband,  by 
which  the  plaintiff  agreed  to  sell,  and  he  agreed  to  purchase,  at  the 
price  of  $250,  the  apparatus  to  use  in  the  quarry.  This  is  contradicted 
by  evidence  on  the  part  of  the  defendant,  and  in  her  behalf  further 
evidence  was  given,  tending  to  prove  that  the  husband  had  no  au- 
thority from  the  defendant  to  make  such  purchase  on  her  account. 
The  burden  of  proof  was  with  the  plaintiff  to  show  that  the  sale  was 
made,  and  that  the  husband  was  authorized  to  make  the  purchase  for 
the  defendant.  In  view  of  all  the  circumstances  appearing  by  it,  the 
evidence  presented  a  question  of  fact  upon  the  subject  of  the  author- 
ity of  the  husband,  and  permitted  the  conclusion  that  he  was  the  de- 
fendant's agent  in  the  business  of  operating  the  quarry,  and  market- 
ing the  stone  taken  from  it;  and  upon  finding  that  fact  the  jury  were 
justified  in  the  further  conclusion  that  he  had  authority  to  purchase 
for  her  the  machinery  to  be  used  in  working  the  quarry. 

The  alleged  agreement  of  sale  was  evidenced  by  no  writing,  and 
no  payment  was  made  of  any  part  of  the  purchase  price.  It  is  there- 
fore contended  on  the  part  of  the  defendant  that  the  agreement  was 
within  the  statute  of  frauds,  and  void.  2  Rev.  St.  p.  136,  §  3.  There 
was  no  act  of  delivery  and  acceptance  at  the  time  the  alleged  con- 
tract was  made,  but  the  property  was  then  at  the  quarry,  under  an  ar- 
rangement with  the  husband  by  which  the  plaintiff  had  rented  it  for 
use  there;  and,  assuming  that  the  husband  was  such  agent,  and  rented 
it  for  the  defendant,  the' property  was  then  in  her  possession  as  lessee. 
Upon  the  subject  of  delivery  and  acceptance,  the  trial  court  charged 
the  jury  that  the  husband  then  had  the  possession  of  the  engine,  either 
in  his  own  right,  or  as  agent  of  his  wife;  and  that,  if  it  was  then 
understood  and  agreed  between  the  parties  that  there  was  or  should 
be  a  sale,  "that  sale  was  a  valid  sale,  and  the  only  question  remaining 
for  you  to  determine  is  whom  the  sale  was  made  to;"  and  thai,  "if 
he  had  the  entire  possession,  of  course  he  could  not  get  any  more  pos- 
session, and  there  was  no  necessity  of  any  writing,  no  necessity  of  an) 
payment,  or  necessity  of  any  further  delivery."  The  view  of  the 
court  evidently  was  that  no  act  further  than  the  making  of  the  oral 
ement  of  sale  and  purchase  was  essential  to  its  validity,  and  t.» 
ler  the  contract  effectual,  if  the  property  was  then  in  the  posses- 
sion of  the  party  in  whose  behalf  it  was  made  as  purchaser.  The  de 
fendant'  ol    -      i  ption  to  the  proposition  so  charged.     Th 

statute  requin  to  support  such  a  contract  a  subscribed  memorandum 
of  it  in  writing,  unless  the  buyer  shall  accepl  the  property,  or  some 
part  of  it,  or  at  the  hum-  pay  some  pari  of  the  purchase  money;  and 
its  purpose  was  not  to  permU  the  validity  of  such  an  agreement  to 
merely  in  word  .  The  de  ign  of  the  statute  was  in  contracts  of 
this  ch  ■  r,  having  the  importance  represented  by  the  requi 
price  of  the  property,  to  guard  again  t  misunderstanding  of  the  par- 
ties and  perjury,  by  requiring,  in  the  absence  of  any  writing  sub  ct  ibe  I 


<)4  FORMATION    OP    CONTRACT — STATUTE    OF    FRAUDS 

by  the  party  to  be  charged,  that  a  portion  of  the  purchase  money 
.should  at  the  time  be  paid,  or  that  then  or  thereafter  the  purchaser 
should  by  some  act  accept  and  receive  some  of  the  property.  The 
opportunity  and  expressed  purpose  to  accept  is  not  sufficient.  Shind- 
ler  v.  Houston,  1  N.  Y.  261,  49  Am.  Dec.  316. 

Assuming  that  the  machine  was  in  the  possession  of  the  defendant 
at  the  time  the  agreement  to  purchase  was  made,  and  that  the  hus- 
band, as  her  agent,  made  it,  those  facts  alone  were  not  sufficient  to  give 
validity  to  the  contract.  To  hold  otherwise  would  have  the  effect  to 
render  the  mere  words  of  the  parties  to  such  a  contract  effectual,  and 
the  purpose  of  the  statute  would  be  defeated.  The  then  possession 
was  in  no  manner  produced  by  or  derived  from  such  contract,  but 
was  lawfully  taken1  and  held  under  another  and  independent  arrange- 
ment between  the  parties;  and  until  the  purchase  was  evidenced  by 
some  act  of  acceptance,  under  or  in  pursuance  of  the  agreement  to 
buy,  no  valid  sale  would  be  accomplished.  This  is  clearly  the  ex- 
pressed import  and  purpose  of  the  statute,  and  such  is  the  unbroken 
current  of  authority  as  to  its  effect.  The  mere  fact  that  the  property 
was  in  the  possession  of  the  defendant  at  the  time  of  making  the  con- 
tract furnished  no  evidence  of  acceptance  in  its  support.  Edan  v.  Dud- 
field,  1  O.  B.  302;  Lillywhite  v.  Devereux,  15  Mees.  &  W.  285;  In 
re  Hoover,  33  Hun  (N.  Y.)  553;  1  Benj.  Sales,  (Corbin,)  §  173.  But 
there  must  be  some  act  or  conduct  on  the  part  of  the  buyer,  in 
respect  to  the  property,  which  manifests  an  intention  to  accept  it  pur- 
suant to  or  in  performance  of  the  contract  of  sale  and  purchase,  which 
the  parties  have  sought  to  make;  and,  when  the  evidence  is  such  as 
to  warrant  that  conclusion,  the  question  is  usually  one  of  fact  for 
the  jury.  Parker  v.  Wallis,  5  El  &  Bl.  21 ;  Caulkins  v.  Hellman,  47 
N.  Y.  449,  7  Am.  Rep.  461;  Stone  v.  Browning,  51  N.  Y.  211;  Id., 
68  N.  Y.  598. 

This  case  was  not  entirely  without  evidence  upon  the  question. 
There  was  evidence  tending  to  prove  that  some  use  was  made  of  the 
machine  at  the  quarry,  not  only  after  the  alleged  contract  of  sale 
was  made,  but  after  Mr.  Pike  had  notified  the  plaintiff  that  it  was 
subject  to  the  order  of  the  latter,  and  would  be  returned  to  him  at 
such  place  in  Rochester  as  he  might  designate.  This  notice  was  given 
two  weeks  after  the  alleged  purchase,  and  apparently  indicated  a  pur- 
pose to  terminate  the  arrangement  under  which  the  apparatus  had  been 
taken,  and  it  in  terms  imported  no  intention  to  accept  or  retain  it 
under  the  contract  of  sale ;  and  whether  any  act  on  the  part  of  the  de- 
fendant's agent  (assuming  her  husband  was  such)  in  the  control  and 
use  of  the  machine,  after  such  verbal  agreement  was  made,  was  char- 
acterized by  his  intent  to  accept  it  in  observance  and  execution  of 
such  contract,  was  a  question  for  the  jury;  and  to  enable  them  to 
reach  such  conclusion,  and  thus  give  validity  to  the  contract  as  one 
of  sale,  the  fact  must  fairly  have  the  support  of  evidence.  We  do 
not  here  intend  to  express  any  view  upon  the  weight  of  evidence  on 


ACCEPTANCE   AND   RECEIPT  G5 

that  subject;  but  so  far  as  related  to  the  use  made  of  the  apparatus 
after  the  plaintiff  was  so  notified  of  the  purpose  to  terminate  the 
arrangement  for  its  service,  and  return  the  property  to  him,  there  was 
some  evidence  on  the  part  of  the  defendant  to  the  effect  that  such  use 
was  applied  to  pumping  water  from  a  place  mentioned,  in  order  to 
remove  a  pipe  connected  with  it,  and  with  a  view  only  to  take  out 
and  remove  the  pump.  This  may  have  been  consistent  with  no  intent 
to  accept  the  property  as  a  purchaser ;  but,  in  view  of  all  the  evidence 
upon  that  subject,  we  think  the  question  was  one  of  fact  for  the  jury. 

The  suggestion  of  the  plaintiff's  counsel  that  the  question  raised  by 
the  exception  before  mentioned  was  obviated  by  other  portions  of  the 
charge  of  the  court  does  not  seem  to  be  supported.  The  part  of  the 
charge  in  question  is  not  qualified,  necessarily  or  in  fact,  by  any  in- 
struction given  to  the  jury.  So  far  as  appears,  they  were  permitted 
to  understand  that  the  fact  of  possession  by  the  defendant  of  the  prop- 
erty at  the  time  of  making  the  contract  by  her  agent  (if  so  made)  was 
sufficient  to  render  the  contract  of  sale  valid.  While  it  is  true  that, 
in  view  of  such  possession,  nothing  further  was  required  of  the  plain- 
tiff, by  way  of  delivery  of  the  property,  the  matter  of  acceptance  req- 
uisite to  the  validity  of  the  contract  was  dependent  wholly  upon  the 
voluntary  act  of  the  other  party  to  such  contract. 

It  is  deemed  unnecessary,  for  the  purposes  of  another  trial,  to  ex- 
press consideration  of  any  other  question  presented  on  this  review. 
The  judgment  and  order  should  be  reversed,  and  a  new  trial  granted, 
costs  to  abide  the  event.    All  concur. 


SNIDER  v.  THRALL. 

(Supreme  Court  of  Wisconsin,  1SS3.  50  Wis.  074,  14  N.  W.  S14.) 
COLE,  C.  J.  We  think  there  is  no  sufficient  reason  for  holding 
that  evidence  of  the  sale  of  the  house  by  the  defendant  to  the  plain- 
tiit  upon  the  chattel  mortgage  was  not  admissible  under  the  answer. 
The  answer,  in  fact,  sets  up,  both  as  a  defense  and  by  way  of  coun- 
ter-claim, the  sale  of  the  house  for  the  agreed  price  of  $140,  which 
the  plaintiff  was  to  pay  in  work  and  materials  on  demand.  What 
more  was  it  necessary  to  state  in  the  answer  to  admit  all  evidence  in 
ard  to  tin-  sale  of  the  house?  This  hou  eems  to  have  been 
treated  by  the  owner  of  the  realty  as  pi  l  property.    Boyd  gave 

a  chattel  morl  upon  it  to  the  defendant  when  he  owned  the  lot 

on  which  it  was  situated.  !!<•  testified  thai  lie  sold  the  premises  to 
Perkins,  subjeel  to  the  mortgage.  Tin-  plaintiff  bought  the  premises 
of  Perkins,  and  says  that  In-  purchased  this  house  of  him  and  entered 
into  po  .n  thereof.     In   this  statement,  that   he  purchased  the 

house  f.f  Perkins,  he  is  contradicted  by  other  witm     i    . 

The  COUnty  COUll    found  as   a    fart    that    the  defendant,  on   (lie   ninth 
of  June,    1  ild   and   delivered   tO   the    plaintiff  the   house   for   the 

Sali      -5 


06  FORMATION    OF    CONTRACT STATUTE    OF    FRAUDS 

sum  of  $140,  which  sum  the  plaintiff  agreed  to  pay  in  cash,  and  in 
work,  services,  and  materials,  upon  demand.  This  finding  is  amply 
sustained  by  the  evidence.  But  the  learned  counsel  for  the  plaintiff 
insists  that  the  sale  of  the  house  was  void,  because  no  note  or  mem- 
orandum of  the  contract  in  writing  was  made  and  subscribed  by  the 
parties  to  be  charged,  so  as  to  take  the  case  out  of  the  statute  of 
frauds.  It  appears  that  at  the  time  of  this  sale  the  plaintiff  was  in 
possession  of  the  house  and  premises.  The  court  finds  that  the  plain- 
tiff went  into  possession  of  the  house  und:r  the  sale  and  has  occupied 
the  same  ever  since.  If  the  plaintiff  did  take  possession  of  the  house 
under  the  sale  made  by  defendant,  as  found  by  the  court,  this  would 
meet  the  conditions  of  the  statute.  The  transaction  then  would 
amount  to  a  delivery  of  the  house  by  the  vendor,  or,  at  all  events,  it 
would  be  all  the  delivery  that  could  be  made,  when  the  nature  of  the 
property  was  considered.  It  seems  to  us  it  would  be  a  complete 
and  perfect  sale  and  delivery  of  the  house,  so  that  thereafter  the  title 
would  be  in  the  plaintiff.  Now,  does  it  make  any  difference,  as  af- 
fecting the  validity  of  the  contract,  that  the  plaintiff  had  been  in  pos- 
session prior  to,  or  that  he  was  in  possession  at,  the  time  the  chattel 
mortgage  was  foreclosed.  We  cannot  see  that  it  should  change  the 
result.  Certainly,  if  the  plaintiff  had  removed  from  the  house  when 
the  mortgage  was  foreclosed,  had  delivered  possession  to  the  defend- 
ant, and  then  had  purchased  the  house  and  gone  into  possession, 
there  could  be  no  doubt  that  these  acts  would  take  the  case  out  of  the 
statute. 

Now,  what  was  done  really  amounted  to  this,  as  we  understand  the 
facts.  The  law  surely  did  not  require,  under  the  circumstances,  that 
the  plaintiff  should  go  through  the  idle  ceremony  of  removing  from 
the  house,  delivering  up  possession  to  the  defendant,  and  then  going 
back  into  possession  under  the  sale  in  order  to  make  the  contract 
valid.  The  law  is  founded  in  reason  and  common  sense,  and  requires 
the  performance  of  no  such  useless  acts  to  make  a  sale  valid.  A 
person  can  sell  his  property  to  his  bailee  and  make  a  good  delivery 
thereof  without  actually  taking  the  property  into  his  own  possession 
and  then  returning  it  to  the  possession  of  the  vendee.  The  question 
in  the  case  would  seem  to  be,  did  the  plaintiff  really  purchase  the 
house  on  the  mortgage  sale  and  go  into  the  possession  of  the  same 
as  the  owner  under  such  sale?  If  he  did,  as  found  by  the  court,  the 
contract  was  not  within  the  statute.  The  court  also  found  that  there 
was  an  agreement  between  the  parties  that  the  plaintiff  should  pay 
for  the  house  in  money,  work,  and  materials  as  demanded ;  and 
that  whatever  work  had  been  done  by  plaintiff,  and  all  money  paid 
and  materials  furnished  by  him,  had  been  applied  according  to  the 
agreement  at  the  time  of  sale. 

It  cannot  be  denied  that  there  is  evidence  to  sustain  these  findings. 
It  follows  from  these  views  that  the  judgment  of  the  county  cour« 
must  be  affirmed. 


EARNEST   OK   PART   PAYMENT  67 


IV.  Earnest  or  Part  Payment 


JACKSON  v.  TUPPER. 

(Court  of  Appeals  of  New  York,  1SS6.    101  N.  Y.  515,  5  N.  E.  05.) 

Andrews,  J.  It  is  conceded  that  the  oral  contract  of  February 
28,  1880,  for  the  sale  and  storage  of  the  ice,  was,  when  made,  void,  un- 
der the  statute  of  frauds.  It  must  also  be  conceded,  under  the  decisions 
in  this  state,  that  it  was  not  validated  by  the  payment  made  in  May, 
1880.  By  our  statute,  payment  operates  to  take  an  oral  contract  for 
the  sale  of  goods  for  the  price  of  $50  or  more,  out  of  the  statute,  only 
when  made  at  the  time  of  the  contract.  2  Rev.  St.  136,  §  3.  The 
decisions  have  construed  this  provision  of  the  statute  with  great 
strictness.  Hunter  v.  Wetsell,  57  N.  Y.  375,  15  Am.  Rep.  50S;  s. 
c,  84  N.  Y.  549,  38  Am.  Rep.  544;  Allis  v.  Read,  45  N.  Y.  142. 
It  is  in  substance  held  that  payment  subsequently  made,  although 
conforming  to  the  oral  agreement,  is  insufficient  of  itself  to  make  the 
prior  oral  agreement  valid.  There  must  be  enough,  in  addition  to 
the  act  of  payment,  to  show  that  the  terms  of  the  prior  oral  contract 
were  then  in  the  minds  of  the  parties,  and  were  reaffirmed  by  them, 
and  this  being  shown  a  cause  of  action  arises,  not  on  the  prior  oral 
contract,  but  on  the  new  contract  made  at  the  time  of  the  payment. 

The  plaintiffs  did  not  bring  their  case  within  this  principle.  There 
was  no  restatement  of  the  terms  of  the  prior  oral  agreement  when 
the  payment  of  May  1,  1880,  was  made,  and  no  express  recognition 
thereof,  nor  was  the  payment  made  for  the  avowed  purpose  of  bind- 
ing the  prior  bargain.  It  is  expressly  found  that  when  the  payment 
was  made  nothing  was  said  by  either  party  about  the  contract  of 
February  28,  1880,  or  its  terms.  But  a  prior  void  contract  may  be 
dated  by  a  subsequent  receipt  and  acceptance  by  the  buyer,  pur- 
suant thereto,  of  the  goods,  or  part  of  them,  which  are  the  subject 
of  the  contract.  2  Rev.  St.  136,  §  3;  McKnight  v.  Dunlop,  5  N. 
Y.  r.w,  ??  Am.  Dec.  370.  Where  tin's  lias  been  done,  the  cause  of 
action  arises  on  the  original  oral  agreement,  authenticated  by  the 
of  acceptance.  There  is  no  statute  difficulty,  as  in  the  case  of  a 
subsequenl  payment,  because  the  statute  does  not,  as  in  thai  case, 
require  thai  the  acceptance  musl  I"-  at  the  time  of  the  making  of  the 
oral  agre<  ment. 

It  was  found  in  this  case  that,  after  the  oral  agreement  of  February 
was  made,  "the  said  ice  was  received  and  accepted  by  the 
plaintiffs."  It  is  impossible  to  construe  the  finding  except  as  re- 
ferring to  the  ice  which  was  the  subject  of  the  oral  agreement  of 

For  dl  "i    Ion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  |§  82.  88. 


GS  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

that  dale,  and  as  referring  to  an  acceptance  thereunder.     This  re- 
lieved the  contract  from  the  bar  of  the  statute. 

No  question  is  presented  as  to  the  right  of  the  plaintiffs  to  the 
judgment  recovered,  assuming  that  the  contract  of  February  28, 
1880,  was  validated.    The  judgment  should  be  affirmed. 


WEIR  v.  HUDNUT. 

(Supreme  Court  of  Indiana,  1SSS.     115  Iud.  525,  IS  N.  E.  21.) 

Action  by  Charles  Weir  against  Theodore  Hudnut  for  damages 
sustained  by  the  refusal  of  defendant  to  accept  corn  purchased  from 
plaintiff.  From  a  judgment  sustaining  a  demurrer  to  the  complaint, 
plaintiff  appealed. 

Elliott,  J.     The  appellant's  amended  complaint,  omitting  the- 
formal  parts,  is  this:    "That  the  plaintiff  sold  five  thousand  bushels 
of  corn  to  the  defendant,  under  a  certain  contract ;  that  is  to  say,  the 
defendant  agreed  to  pay  to  the  plaintiff  for  said  corn  fifty  cents  per 
bushel;  and  in  part  payment  therefor,  in  addition  to  said  fifty  cents 
per  bushel,  the  defendant  further  agreed  to  hire  to  plaintiff,  and  to 
give  him  the  use  of,  a  sufficient  number  of  sacks  in  which  to  sack  said 
corn,  and  deliver  the  same  to  the  defendant,  which  said  use  of  said 
sacks  became  and  was  a  part  of  the  consideration  and  payment  for 
said  corn,  and  a  part  of  the  purchase  price  therefor,  which  said  pur- 
chase price  would  have  been  more  than  fifty  cents  per  bushel  in  cash, 
but  for  the  payment  and  furnishing  the  use  of  said  sacks  by  said  de- 
fendant as  aforesaid;  and  it  was  further  agreed  by  and  between  the 
plaintiff  and  the  defendant,  as  a  part  of  said  agreement  of  sale,  that 
said  corn  was  to  be  by  the  plaintiff  delivered  upon  the  bank  of  the 
Wabash  river  at  a  point  about  two  miles  above  the  Louisville  &  Nash- 
ville Railroad  bridge,  and  that  the  said  sum  of  fifty  cents  per  bushel 
was  to  be  paid  by  the  defendant  to  the  plaintiff  as  soon  as  the  same  was 
shelled  and  delivered  upon  the  bank  of  the  said  river,  as  aforesaid. 
The  plaintiff  further  says  that  in  pursuance  of  said  contract,  and  in 
part  payment  of  the  purchase  price  of  said  corn,  the  defendant  did 
then  and  there  at  the  time  of  the  making  of  said  contract,  furnish  to 
the  plaintiff  fifteen  hundred  sacks,  to  have  the  use  of  the  same  for 
sacking,  holding,  and  delivering  said  corn,  which  sacks  were  of  the 
value  of  one  hundred  dollars,  and  the  use  of  the  same,  as  aforesaid, 
was  worth  the  sum  of  twenty-five  dollars.     The  plaintiff  further  says 
that  he  did,  according  to  the  terms  of  said  contract,  deliver  said  corn, 
shelled  and  sacked,  upon  the  bank  of  the  Wabash  river,  at  the  place 
agreed,  in  good  order  and  condition,  of  all  of  which  he  then  and  there 
notified  the  defendant,  but  that  the  defendant  wholly  refused  and  neg- 
lected to  accept  or  take  said  corn  according  to  said  contract,  etc.,  and 
that  by  reason  of  the  premises  the  plaintiff  was  damaged  in  the  sum 
of  one  thousand  dollars." 


EARNEST   OK   PART   PAYMENT  G9 

This  complaint,  it  is  important  to  note,  avers  that  the  delivery  of 
the  sacks  in  which  the  corn  was  to  be  placed  to  the  seller  was  in  part 
payment  of  the  price  of  the  corn.  It  is  averred,  not  only  that  payment 
was  to  be  made  in  money  and  by  furnishing  the  sacks,  but  that  part 
payment  was  made  of  the  agreed  price  by  furnishing  the  sacks.  We 
emphasize  the  fact  that  it  was  agreed  that  payment  should  be  made  by 
furnishing  the  seller  with  sacks,  and  that  the  sacks  were  furnished  to 
him  as  part  payment  of  the  price  of  the  corn  which  the  appellee  pur- 
chased. It  is  this  fact  which  distinguished  the  case  from  Hudnut  v. 
Weir,  100  Ind.  501.  Here  the  complaint  avers,  and  the  demurrer  ad- 
mits, that  it  was  agreed  that  the  sacks  were  to  be  furnished  in  part 
payment,  and  that  in  part  payment  they  were  furnished.  In  the  com- 
plaint which  came  before  us  in  Hudnut  v.  Weir,  there  was  no  such 
averment.  It  is,  perhaps,  difficult  to  conceive  how  the  averment  can 
be  established  by  evidence,  but  with  that  question  we  are  not  now  con- 
cerned, for  it  is  admitted  to  be  true.  It  will  not,  of  course,  be  suffi- 
cient to  prove  a  part  performance,  for  that  will  not  be  an  "earnest 
to  bind  the  bargain,"  since  the  plaintiff  must  prove  payment,  as  pay- 
ment, of  part,  at  least,  of  the  agreed  price.  But  as  the  case  is  now 
presented  to  us  there  was,  it  is  conceded  by  the  demurrer,  payment  of 
part  of  the  price  agreed  upon  by  the  contracting  parties.  They  agreed 
what  should  be  taken  in  payment,  and  what  was  agreed  upon  was  in 
part  actually  paid.  What  the  parties  agree  shall  constitute  payment 
the  law  will  adjudge  to  be  payment.  It  is  competent  for  parties  to 
designate  by  their  contract  how,  and  in  what,  payment  may  be  made. 
It  is  by  no  means  true  that  payment  can  only  be  made  in  money ;  on 
the  contrary,  it  may  be  made  in  property  or  in  services.  In  short, 
whatever  the  parties  agree  shall  constitute  payment  will  be  regarded 
by  the  courts  as  payment,  provided  the  thing  agreed  upon  is  of  some 
value.    Kuhns  v.  Gates,  92  Ind.  66;  Tilford  v.  Roberts,  8  Ind.  254. 

It  has  been  held  in  many  cases  that  payment  in  articles  of  property 
will  bind  the  bargain,  and  prevent  the  operation  of  the  statute  of 
fraud..  Sharp  v.  Carroll,  66  Wis.  62,  27  N.  W.  832;  Bach  v.  (  )wen, 
5  Term  R.  409;  Phillips  v.  Mills,  55  Ga.  633;  Hunter  v.  Wetsell,  84 
X.  Y.  549,  38  Am.  Rep.  544;  Combs  v.  Bateman,  10  Barb.  576.  A 
text  writer  thus  states  the  rule:  "There  seems,  there  lure,  no  reason 
doubt  that  the  part  paymenl  required  by  the  statute  of  frauds  as 
an  act  in  addition  to  the  parol  cohtracl  need  not  be  made  in  money, 
but  that  anything  of  value,  which  by  mutual  agreement  is  given  by 
bir  er  and  accepted  by  the  seller,  on  accounl  or  in  pari  satisfaction 
of  the  price,  will  be  equivalenl  to  pari  payment."  1  Benj.  Sales,  § 
194.  Another  writer  a  :  "The  statute  evidently  contemplates  that 
the  part  paymenl  hall  be  made  al  the  time  the  contract  is  entered  into, 
and  shall  be  in  mom  omethin  ;  of  value,  which  is  accepted  as  its 

equival<  Wood,  Fraud  .  §  294.    The  thing  delivered  in  part  pay- 

menl urn  t  be  of  Borne  value,  bul  if  of  any  value  at  all,  it  will  be  suffi 
t  to  hind  th(  iin.    (  »ne  of  the  old  writers  says  that,  "if  all 


70  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

or  part  of  the  money  is  paid  in  hand,  or  I  give  earnest  money,  albeit 
it  is  only  a  penny,"  the  contract  is  valid.  1  Shep.  Touch.  224;  Lang- 
ford  v.  Tyler,  6  Mod.  162;  Artcher  v.  Zeh,  5  Hill,  200;  Wood,  Frauds, 
§  293.  Part  payment  of  the  price  is  earnest  money  and  binds  the 
bargain.  Howe  v.  Hayward,  108  Mass.  54,  11  Am.  Rep.  306;  Bissell 
v.  Balcom,  39  N.  Y.  281 ;  2  Bl.  Comm.  447;  Wood,  Frauds,  294. 

The  complaint  brings  the  case  within  the  principles  declared  by  the 
authorities,  for  it  shows  that  the  value  of  the  use  of  the  sacks  was  $25, 
and  that  the  purchase  price  to  that  extent  was  paid  by  the  seller's 
furnishing  the  sacks  for  the  use  of  the  buyer.  If  the  seller  had  agreed 
to  furnish  for  the  use  of  the  buyer  a  corn-sheller,  or  some  other  ma- 
chine, as  part  payment  of  the  purchase  price,  it  would  be  very  clear 
that  such  a  payment  would  bind  the  bargain ;  and  there  is  no  difference 
in  principle  between  such  a  case  and  one  like  the  present,  for  it  can 
make  no  difference  what  thing  of  value  is  given  in  part  payment.  Of 
course,  the  thing  must  be  given  in  part  payment  of  the  purchase  money 
agreed  upon,  or  it  will  be  unavailing;  but  here,  as  we  have  said,  the 
property  furnished  the  buyer  is  conceded  to  have  been  in  part  payment 
of  the  agreed  price  of  the  corn.    Judgment  reversed. 


V.  The  Note  or  Memorandum — Agents  Authorized  to  Sign 


DUNHAM  v.  HOOTMAN. 

(Supreme  Court  of  Missouri,  1900.     153  Mo.  625,  55  S.  W.  233,  77  Am.   St. 

Rep.  741.) 

Action  by  W.  S.  Dunham  against  W.  H.  Hartman.  Judgment  for 
defendant.     Plaintiff  appeals. 

Valliant,  J.8  This  is  a  suit  to  recover  of  defendant  damages  for 
refusing  to  complete  a  purchase  of  land  which  it  is  alleged  was  struck 
off  to  him  on  his  bid  at  a  foreclosure  sale  under  a  deed  of  trust. 
Upon  the  trial,  at  the  close  of  the  plaintiff's  evidence,  the  court  in- 
structed the  jury  that  under  the  evidence  the  plaintiff  was  not  entitled 
to  recover.  Plaintiff  took  a  nonsuit,  with  leave,  and,  after  an  inef- 
fectual motion  to  set  the  same  aside,  brought  this  appeal. 

The  evidence  tended  to  show  that  in  1892  the  then  owners  of  the 
land  executed  a  deed  of  trust" to  one  Young,  trustee,  to  secure  a  debt 
therein  specified,  subject  to  prior  incumbrances  referred  to.  It  was 
provided  in  the  deed  that  in  case  of  Young's  inability  or  refusal  to 
act  when  the  debt  was  due,  and  payment  not  made,  the  then  acting 
sheriff  of  Johnson  county  might  proceed  to  foreclose  by  sale,  etc.,  as 

"  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  34-40. 
s  Tart  of  the  opinion  is  omitted. 


THE  NOTE  OR  MEMORANDUM — AGENTS  AUTHORIZED  TO  SIGN  71 

therein  directed.  Young  did  decline  to  act,  and  the  holder  of  the  debt 
and  deed  of  trust  requested  the  plaintiff  in  this  suit,  who  was  then 
the  sheriff  of  that  county,  to  proceed  to  sell  according  to  the  require- 
ments of  the  deed,  which  he  did.  It  was  an  auction  sale  at  the  court- 
house door,  conducted  by  the  sheriff  in  person,  assisted  by  one  of 
his  deputies,  who  read  the  advertisement  for  him.  At  this  auction  the 
defendant  bid  $3,050,  and  the  property  was  struck  off  to  him.  The 
parties  went  from  the  place  of  sale  to  the  sheriff's  office,  apparently 
to  close  the  matter,  and  the  defendant  was  about  to  write  a  check  for 
the  amount  of  his  bid,  when  it  was  suggested  by  some  one  present 
that  the  sale  was  made  subject  to  the  prior  incumbrances.  Then  de- 
fendant said  that  he  "did  not  figure  it  that  way,"  and  would  go  and 
see  about  it.  He  then  went  out,  and  returned  in  about  two  hours, 
and  said  he  would  not  take  the  property  unless  he  was  compelled  to. 
After  that  the  sheriff  readvertised,  and  held  another  auction  sale,  at 
which  the  property  was  struck  off  to  M.  C.  Shryack  and  C.  H.  Har- 
rison, the  highest  bidders,  for  $725,  which  sale  was  consummated. 
The  second  sale  was  about  a  month  after  the  first. 

Plaintiff  offered  in  evidence  the  following:  "I  now  offer  in  evi- 
dence this  memoranda,  found  on  page  270  of  the  sheriff's  sale  book, — 
the  memoranda  made  by  the  sheriff,  and  the  one  made  by  the  deputy 
sheriff,  so  far  as  can  be  ascertained, — which  memoranda  is  in  words 
and  figures  as  follows,  to  wit:  'Sold  to  W.  H.  Hartman  for  $3,- 
050.00.  Sold  to  M.  C.  Shryack  and  C.  H.  Harrison.'  "  Defendant 
objected  to  this  as  evidence,  and  the  court  sustained  the  objection. 
Up  to  this  time  there  had  been  no  evidence  of  the  refusal  of  the 
trustee  to  act,  and  the  request  of  the  holder  of  the  note  that  the  sheriff 
execute  the  trust;  but  such  evidence  immediately  followed  the  ruling 
excluding  the  memorandum,  but  the  memorandum  was  not  again 
offered.  Just  when  and  by  whom  the  memorandum  was  made  is  not 
certain.  The  deputy  sheriff  testifies  that  he  made  it  as  soon  as  the 
land  was  struck  off  to  the  defendant,  while  the  sheriff  testifies  that  he 
made  it  himself  after  the  defendant  returned  to  his  office  the  second 
lime,  and  informed  him  that  he  would  not  take  the  land  if  he  was 
not  compelled  to,  which  was  about  two  hours  after  the  auction  was 
r.  The  next  day  a  deed  was  tendered  to  defendant,  which  he  re- 
ed. What  else,  if  anything,  was  on  the  page  270  mentioned,  besides 
the  memorandum  read,  is  not  shown  by  the  evidence.  There  was  tes- 
timony tending  to  show  that,  before  offering  the  property  for  sale, 
the  sheriff  announced  that  it  was  to  be  sold  subject  to  the  incum- 
brances. Whether  or  not  defendant  was  within  hearing  at  that  time, 
not  appear.  This  was  substantially  all  that  the  evidence  tended 
1<»  prove. 

1.  if  we  a  nine  thai  the  sheriff  was  the  implied  agent  of  the  de- 
fendant, and  h  authorized  to  make  the  memorandum  required 
by  the  statue  of  frauds  to  hind  him,  the  plaintiff's  case  fails,  because 
the  memorandum  attempted  to  be  shown  in  evidence  is  itself  insuffi- 


.  - 


2  FORMATION    OF    CONTRACT STATUTE    OF    FRAUDS 


cient.  All  that  we  are  told  of  the  memorandum  is  that  it  was  made 
on  the  sheriff's  sales  book,  and  is  in  these  words:  "Sold  to  W.  H. 
Hartman  for  $3,050.00."  It  was,  perhaps,  intended  to  be  shown  that 
this  memorandum  was  written  on  a  page  in  the  book  in  which  was  the 
notice  of  sale,  containing  the  names  of  the  parties  and  a  description 
of  the  property;  but,  if  the  page  contains  anything  of  that  kind,  it 
was  not  offered  in  evidence,  and  the  record  does  not  show  it.  In 
Ringer  v.  Holtzclaw,  112  Mo.  519,  20  S.  W.  800,  it  is  said,  "All  the 
authorities  are  agreed  that  the  memorandum  must  state  the  contract 
with  reasonable  certainty,  so  that  its  essential  terms  can  be  ascer- 
tained from  the  writing  itself,  without  resort  to  parol  evidence."  This 
memorandum  does  not  show  what  was  sold,  nor  for  whom  the  sale 
was  made.  Besides,  we  are  left  in  doubt,  between  the  plaintiff's  two 
main  witnesses,  as  to  who  made  the  memorandum,  and  when  it  was 
made.  Ordinarily,  when  the  sheriff  is  acting  officially,  it  makes  no 
difference  whether  he  or  his  deputy  does  the  act;  but  in  this  instance 
it  does  make  a  difference,  because,  if  the  sheriff  did  it,  it  was  not  done 
until  after  the  controversy  had  arisen,  and  after  the  defendant  had 
refused  to  consummate  the  sale,  two  hours  after  the  auction  was  over. 
If  there  was  an  implied  agency,  that  agency  was  revoked  by  the  de- 
fendant's repudiation  of  the  transaction.  Certainly  the  agent  could 
not  act  in  spite  of  his  principal,  and  do  for  him  in  his  presence  what 
he  refused  to  do  for  himself.  Between  the  fall  of  the  hammer  and 
the  writing  of  his  name  in  the  memorandum,  the  bidder  has  a  locus 
penitentise,  and  may  withdraw  his  bid.  Pike  v.  Balch,  38  Me.  302,  61 
Am.  Dec.  248;    Gwathney  v.  Cason,  74  N.  C.  5,  21  Am.  Rep.  484. 

The  memorandum  was:  "Sold  to  W.  H.  Hartman  for  $3,050.00. 
Sold  to  M.  C.  Shryack  and  C.  H.  Harrison."  We  cannot  reconcile 
the  statements  of  the  sheriff  and  his  deputy  by  concluding  that  the 
sheriff  was  referring  to  the  Shryack  and  Harrison  part  of  the  mem- 
orandum, because  he  said  he  made  the  memorandum  directly  after 
defendant  came  to  his  office  the  second  time  that  afternoon,  and  re- 
fused to  take  the  property,  which  was  about  two  hours  after  the  sale. 
The  sale  to  Shryack  and  Harrison  was  nearly  a  month  after.  The 
recognizing  of  the  auctioneer  as,  the  agent  of  both  parties  in  such 
transactions  is  one  of  those  judicial  encroachments  on  the  terms  of 
the  statute  of  frauds  that  we  inherited  with  the  statute  itself  from 
England,  and  grew  out  of  what  the  courts  considered  a  necessity; 
but,  having  gone  to  the  extent  of  creating  an  agent  for  the  party 
sought  to  be  charged,  the  courts  have  always  required  that  his  act 
should  be  proven  with  reasonable  certainty,  and  this  the  plaintiff  failed 
to  do  in  this  case. 

2.  But  was  the  sheriff  acting  in  his  official  capacity  here,  and  was 
he  for  this  purpose  the  defendant's  agent?  In  Tull  v.  David,  45  Mo. 
444,  100  Am.  Dec.  385,  it  was  held  that  at  an  auction  sale  under  a 
deed  of  trust,  the  trustee,  acting  as  auctioneer,  is  not  the  agent  for 
the  buyer,  so  as  to  bind  him  by  a  memorandum  made  at  the  sale.    The 


THE  NOTE  OR  MEMORANDUM — AGENTS  AUTHORIZED  TO  SIGN  73 

ground  of  the  decision  is  that  to  construe  the  trustee,  under  such  cir- 
cumstances, to  be  the  agent  of  the  bidder,  would  be  to  make  one  party 
to  the  supposed  contract  the  other's  agent  to  make  the  contract.  The 
court  quotes  from  Bent  v.  Cobb,  9  Gray  (Mass.)  397,  69  Am.  Dec. 
295:  "The  great  mischief  intended  to  be  prevented  by  the  statute 
would  still  exist,  if  one  party  to  a  contract  could  make  a  memorandum 
of  it  which  would  absolutely  bind  the  other.  If  such  were  its  true 
construction,  it  would  be  a  feeble  security  against  fraud,  or,  rather, 
it  would  open  the  door  for  its  easy  commission.  *  *  *  Nor  can 
it  make  any  difference,  as  to  the  power  of  the  vendor  to  make  the 
memorandum  binding  on  the  vendee,  that  the  sale  is  made  by  the 
former  in  his  representative  or  fiduciary  character,  as  executor,  ad- 
ministrator, guardian,  or  trustee."  This  court  in  that  case  further 
say :  "We  are  referred  to  no  decided  case  that  adopts  the  principle 
contended  for  by  the  plaintiff  in  this  suit.  The  nearest  approach  to 
it  is  found  in  the  case  of  Wiley  v.  Roberts,  27  Mo.  388,  and  Stewart 
v.  Garvin,  31  Mo.  36,  where  it  is  held  that  a  sheriff,  in  selling  lands 
under  an  order  of  court  in  proceedings  for  partition,  is  a  competent 
agent  of  the  parties  to  make  a  binding  memorandum  of  the  sale  made 
by  him.  *  *  *  But  the  sheriff  in  such  cases  acts  simply  in  the 
execution  of  a  judicial  power  of  sale,  and  not,  in  strictness,  as  a 
trustee.  No  title  is  vested  in  him.  He  acts  merely  as  the  instrument 
of  the  law  in  effecting  the  sale  and  conveyance.  He  is  a  public  officer,, 
and  holds  his  position  under  the  provisions  of  law,  and  not  as  the 
mere  appointee  of  private  parties." 

In  Tatum  v.  Holliday,  59  Mo.  422,  it  is  held  that  where  a  trustee 
dies,  and  the  court  appoints  the  sheriff  to  foreclose  the  deed  of  trust, 
the  sheriff  acts  in  his  official  capacity;  and  the  court  say,  arguendo, 
that  he  is  responsible  on  his  bond  for  his  act.  There  the  trustee  had 
died,  and  the  circuit  court  had  made  the  appointment  of  the  sheriff 
upon  the  petition  of  the  partv  in  interest,  as  required  by  the  statute 
(Wag.  St.  p.  1347;  section  8683,  Rev.  St.  1889).  Upon  that  author- 
ity the  St.  Louis  court  of  appeals  decided  likewise  in  Barclay  v.  Hates, 
2  Mo.  App.  139.  If  the  condition  arises,  and  the  court  appoints  the 
sheriff  to  foreclose  the  deed  of  trust,  as  the  statute  requires,  he  is  as 
much  hound  to  perform  that  duty  as  he  would  be  under  a  decree  of 

e  to  foreclose  a  mortgage,  or  to  sell  for  partition,  and  his  official 
bond  covers  his  acts.  Bui  an  individual  cannot  impose  official  duty 
on  the  sheriff,  and  the  sheriff  cannol  by  contract  enlarge  his  official 
character.  In  the  case  at  bar  the  sheriff  was  not  appointed  by  the 
irt,  nor  in  pursuance  of  the  statute,  bul  by  an  individual,  and  in 
pur  e  of  the  terms  of  a  private  deed.    In  such  ease  he  is  no  more 

acting  in  his  official  capacity,  nor  liable  as  such,  than  he  would  be  if 

■  d  to  assisl  in  any  other  private  Ihi  Win  i 

when  he  is  appointed  by  the  court,  in  the  words  above  quoted,  "he  acts 
simply  in  the  execution  of  a  judicial  power,"  yet  when  he  is  employed 
by  an  individual  he  is  simply  a  Uted   trustee.      In  the  one  i 


74  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

he  is  responsible  as  sheriff,  on  his  bond.  In  the  other,  he  is  only 
liable  as  an  individual.  In  the  one  case,  if  the  law  were  still  as  it  was 
when  Stewart  v.  Garvin,  31  Mo.  36,  Tatum  v.  Holliday,  59  Mo.  422, 
and  Springer  v.  Kleinsorge,  83  Mo.  152,  were  decided,  he  would  have 
the  authority  as  the  implied  agent  of  the  bidder,  to  make  a  memoran- 
dum to  bind  him,  in  the  face  of  the  statute  of  frauds.  In  the  other, 
he  would  have  no  such  authority.  We  hold  that  in  this  case  the  sheriff 
was  only  a  substituted  trustee,  acting  in  his  individual,  and  not  his 
official,  capacity,  and  had  no  authority  to  bind  the  defendant  by  any 
memorandum  he  may  have  made. 

3.  The  doctrine  of  agency  in  the  auctioneer  for  both  seller  and 
buyer  was  established  when  the  statute  was  such  that  the  authority  of 
an  agent  to  bind  his  principal  in  a  contract  for  the  sale  of  land  need 
not  have  been  in  writing,  but  might  have  been  conferred  orally  or 
have  been  implied.  Browne,  St.  Frauds,  §§  370,  370a.  In  1887  our 
statute  was  amended  so  as  to  require  the  agent's  authority  to  be  in 
writing.  Since  then  it  would  be  difficult  to  find  any  theory  on  which 
to  base  a  claim  on  the  implied  agency  of  the  auctioneer  in  a  contract 
for  the  sale  of  land.     *     *     *     Affirmed. 


VI.  Effect  of  Noncompliance  with  the  Statute  9 


TIFT  v.  WIGHT  &  WESLOSKY  CO. 

(Supreme  Court  of  Georgia,  1901.     113  Ga.  6S1,  39  S.  E.  503.) 

Action  by  Wight  &  Weslosky  Company  against  N.  F.  Tift  and  oth- 
ers.    Judgment  for  plaintiff.    Defendants  bring  error. 

Little,  J.10  *  *  *  Wight  &  Weslosky  Company  instituted 
an  action,  under  the  statute,  on  an  open  account,  against  the  adminis- 
trators of  Tift,  to  recover  the  sum  of  $103.25,  which  it  was  alleged 
the  defendants'  intestate  was  due  it  for  one  barrel  of  cement  and  a 
named  quantity  of  seed  oats,  of  the  value  alleged ;  a  bill  of  particulars, 
giving  date  of  the  purchase  and  the  value  of  the  several  articles,  be- 
ing attached  to  the  petition.  The  defendants  were  duly  served,  and 
answered  the  petition,  admitting  that  they  were  administrators  as  al- 
leged, and  denying  that  they  were  indebted  to  the  plaintiff  in  the  sum 
alleged,  or  in  any  other  sum,  or  that  any  such  account  was  due  and 
unpaid,  but  said  that  they  were  not  indebted  to  the  plaintiff  in  manner 
and  form  as  alleged,  either  on  any  account  made  by  the  intestate  or 
by  themselves.  This  general  denial  was  all  the  defense  that  was  plead- 
ed in  bar  to  the  action. 

s  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  41. 
io  Part  of  the  opinion  is  omitted. 


EFFECT   OF   NONCOMPLIANCE    WITH    THE    STATUTE  iO 

Briefly  stated,  the  evidence  of  the  plaintiff  showed  that  the  oats  were 
sold  to  the  defendants'  intestate  under  a  parol  contract,  and  by  agree- 
ment they  were  weighed  up  and  set  aside  for  intestate,  and  his  name 
placed  on  them,  and  they  were  charged  to  him  on  the  books  of  the 
plaintiff.  The  evidence  for  the  defendants  tended  to  show  that  the 
goods  were  never  delivered,  but  that  intestate  bought  other  oats.  On 
the  presentation  of  the  case  in  this  court  it  was  contended  that  the  only 
legal  question  involved  was  whether,  under  the  facts,  there  was  a  sale 
of  the  oats,  and  it  was  insisted  that  the  contract  shown  was  an  execu- 
tory contract,  under  which  no  title  could  pass  until  executed,  and  the 
question  was  presented  in  the  brief  under  two  heads :  First,  irrespec- 
tive of  the  statute  of  frauds;  and,  second,  as  affected  by  that  statute; 
and,  as  will  be  seen,  each  of  the  points  so  made  were  decided  adversely 
to  the  contentions  of  the  plaintiffs  in  error,  this  court  ruling — First, 
that  under  the  evidence  the  contract  for  the  sale  of  oats  was  executed ; 
and,  second,  that  whether  the  contract  was  or  was  not  void  under  the 
statute  of  frauds  could  not  be  considered,  as  no  such  defense  was  made, 
nor  was  that  question  passed  on  by  the  trial  judge.     *     *     * 

It  is  admitted  that  the  statute,  as  a  rule,  must  be  specially  pleaded ; 
but  it  is  insisted  that  there  are  certain  exceptions  to  this  rule,  within 
one  of  which  the  case  at  bar  comes.  It  is  contended  that,  when  the 
statute  is  not  specially  pleaded,  the  validity  of  the  contract  sued  on 
may  still  be  raised  by  demurrer,  motion  to  nonsuit,  objection  to  tes- 
timony, or  request  to  instruct  the  jury ;  and  it  is  contended  that  the 
bill  of  exceptions  shows  that  this  defense  was  urged  on  the  trial  of  the 
case  in  such  a  manner  as  to  bring  it  within  the  letter  and  spirit  of  the 
exception  referred  to.  The  claim  that  this  case  comes  within  an  ex- 
I  ion  to  the  general  rule  stated  is  based  on  a  recital  in  the  bill  of  ex- 
ceptions as  follows:  "After  the  evidence  closed  the  said  judge  called 
upon  defendants'  counsel  to  show  cause  why  a  verdict  should  not  be 
directed  for  plaintiff.  Thereupon  defendants'  counsel  presented  to 
the  court  and  argued,  as  reasons  why  a  verdict  should  not  be  directed," 
certain  propositions  of  law,  among  them  that  "the  contract,  being  only 
a  verbal  one,  did  not,  by  reason  of  paragraph  7  of  the  statute  of 
frauds,  bind  the  defendants,  since  there  had  been  no  acceptance  of  any 
pari  of  said  oats,  nor  any  actual  receipt  of  same,  nor  had  there  been 
anything  in  earnesl  or  part  payment  to  bind  the  bargain."  After  such 
entation  the  court  directed  a  verdict  for  the  plaintiff.  Judgment 
follow<  1  accordingly,  and  a  hill  of  exceptions  was  taken,  on  which 
this  conn  rendered  the  judgment  now  sought  to  he  revii  wed. 

In  the  brief  now  before  us  it    is   urged   that    the  case  of  Johnson  v. 

Latimer,  71  Ga.  470,  does  not  sustain  the  ruling  made  in  the  secbn  I 
[note.  We  beg  to  differ  with  counsel  in  this  contention.  It  is  true 
that  the  ruling  made  in  that  case  doe,  nol  go  to  the  extenl  of  holding 
thai  as  the  statute  of  frauds  was  not  pleaded  a  new  trial  should  not  he 
granted,  hut  it  doi  o  to  the  extent  of  holding  that  when-  the  statute 
was  not  pleaded,  and  no  qu<   tion  was  made  which  invoked  the  ruling 


7G  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

by  the  judge  on  that  subject,  a  new  trial  would  not  be  granted,  al- 
though it  appears  that  the  contract  sought  to  be  enforced  should  have 
been  in  writing.  We  know  of  no  reason  why  the  facts  stated  in  the 
record  in  this  case  does  not  bring  it  directly  under  the  ruling  in  the 
Johnson  Case.  The  statute  certainly  was  not  pleaded,  and,  as  we  view 
it,  there  was  no  question  made  before  the  judge  which  invoked  a  rul- 
ing on  the  subject  as  to  whether  the  contract  sought  to  be  enforced 
ne  within  the  provisions  of  the  statute  of  frauds.  It  is  true  that, 
when  the  trial  judge  called  on  counsel  for  the  defendants  verbally  to 
show  cause  why  a  verdict  should  not  be  directed  for  the  plaintiff,  they 
did  verbally  urge  that  the  contract  was  obnoxious  to  the  statute,  and 
it  is  true  that,  having  heard  counsel,  he  then  directed  a  verdict.  Why 
should  he  not  have  done  so?  It  was  the  privilege  of  these  defendants 
to  waive  the  operation  of  the  statute  of  frauds,  if  they  chose  to  do  so. 
Their  defenses  were  only  to  be  adjudged  by  their  pleadings,  and  verbal 
statements  to  the  court  are  not  pleadings. 

I  may  say,  for  myself,  that  I  am  not  at  all  attached  to  what  is  to  us 
.a  modern  doctrine,  that  of  directing  verdicts,  which  now  seems  to  pre- 
vail to  a  great  extent  in  this  state ;  but  I  am  not  prepared  to  go  to  the 
extent  of  ruling  that  verbal  reasons  given  to  the  trial  judge  why  he 
should  not  direct  a  verdict  in  a  particular  manner  call  for  a  ruling  on 
matters  of  defense  which  are  not  pleaded,  but  only  stated  verbally, 
nor  that  his  failure  to  consider  defenses  so  stated  presents  any  question 
for  review  by  this  court.  The  only  question,  under  such  circum- 
stances, which  could  be  considered,  is  whether  the  court  erred  in  di- 
recting a  verdict.  If  the  verdict  which  he  directed  was  demanded  by 
the  evidence,  then,  no  matter  what  reasons  counsel  may  or  may  not 
verbally  have  given  to  the  court  why  this  should  not  be  done,  they 
could  not  have  had  any  effect  as  a  defense  to  the  action. 

Civ.  Code,  §  2693,  par.  7,  declares  that,  to  make  an  obligation  bind- 
ing on  the  promisor,  touching  any  contract  for  the  sale  of  goods  to 
the  amount  of  $50  or  more,  it  must  be  in  writing,  etc.  In  the  case  of 
Armour  v.  Ross,  110  Ga.  413,  35  S.  E.  787,  touching  the  necessity  of 
pleading  the  statute  as  a  defense  to  a  contract  of  the  character  above 
indicated,  Mr.  Justice  Lewis,  in  rendering  the  opinion  of  this  court, 
said:  "The  promisor  can  avail  himself  in  such  a  case  of  a  plea  that, 
the  statute  of  frauds  requiring  the  contract  to  be  in  writing,  the  courts 
cannot  enforce  a  mere  oral  agreement  on  the  subject.  The  promisor, 
on  the  other  hand,  can  waive  this  right,  which  was  evidently  intended 
merely  as  a  personal  privilege  to  him."  Mr.  Browne,  in  his  work  on 
the  Statute  of  Frauds,  §  115  (a),  says:  "The  operation,  then,  which 
the  statute  has  upon  a  contract  covered  by  it,  is  that  no  enforcement 
of  the  contract  can  be  had  while  the  requirements  of  the  statute  re- 
main unsatisfied,  if  the  party  against  whom  enforcement  is  sought 
choose  to  insist  upon  this  defense.  The  statute  does  not  make  the  con- 
tract illegal.  A  contract  which  was  legal  and  actionable  before  the 
statute  is  legal  since,  notwithstanding  the  statute,"  etc.    Again,  in  the 


EFFECT   OF   NONCOMPLIANCE    WITH   THE   STATUTE  77 

case  of  Draper  v.  Dry-Goods  Co.,  103  Ga.  663,  30  S.  E.  566,  63  Am. 
St.  Rep.  136,  Mr.  Justice  Lewis,  in  delivering  the  opinion  of  this  court, 
said:  "The  defense  of  the  statute  of  frauds,  like  that  of  a  plea  of  usu- 
ry, is  in  the  nature  of  a  personal  privilege,  of  which  the  defendant 
can  avail  himself  or  not,  as  he  sees  proper." 

It  is  urged  in  the  brief  that,  where  the  plaintiff  declares  only  on  the 
common  counts,  the  defendant  is  not  called  upon  to  plead  the  statute, 
but  may  avail  himself  of  its  protection  without  pleading  it ;  and  it  is 
averred  that  this  suit  was  upon  the  common  counts,  "indebted  on  open 
account,"  etc.  In  reference  to  this  point,  we  have  first  to  say  that, 
as  the  statute  of  frauds  is  treated  as  not  affecting  the  validity  of  con- 
tracts, it  is  a  well-established  general  rule  that,  unless  the  privilege  of 
requiring  the  statutory  evidence  given  by  it  to  the  party  resisting  the 
enforcement  of  the  contract  is  sufficiently  claimed  by  him  in  some 
proper  pleading,  the  court  will  proceed  with  the  contract  under  com- 
mon-law rules.  Browne,  Frauds,  §  508.  Mr.  Wood  in  his  work  on 
this  subject  says  that  correct  practice  requires  that,  if  a  party  intends 
to  rely  upon  the  statute  of  frauds  as  a  defense,  he  should  set  it  up 
cither' by  plea  or  answer,  and  in  most  of  the  states  he  must  do  so,  or 
he  is  treated  as  having  waived  the  defect.    Wood,  St.  Frauds,  §  537. 

The  exception  which  the  movant  claims  is  made  by  the  record  in 
this  case  is  thus  stated  by  the  last-named  author  (section  537)  :^  "But 
this  is  the  rule  only  in  that  class  of  actions  where  the  declaration  or 
complaint  sets  forth  the  contract  upon  which  the  plaintiff  seeks  re- 
covery, and  has  no  application  in  actions  of  book  account  or  general 
assumpsit,  where  the  nature  of  the  claim  is  not  set  forth,  and  docs 
not  appear  until  the  evidence  is  actually  put  in;  and  in  this  class  of 
cases  the  statute  may  be  relied  upon  in  defense,  although  not  raised 
by  any  pleadings."  Mr.  Browne,  in  his  work  above  cited,  thus  states 
the  exception :  "Where  the  plaintiff  sues  on  the  common  counts,  and 
therefore  does  not  disclose  the  foundation  of  his  case  until  he  puts  in 
his  evidence,  *  *  *  the  defendant  will  be  allowed  to  insist  upon 
this  statutory  privilege,  although  his  pleading  has  not  in  terms  done 
so."  There  is,  therefore,  no  difference  between  the  rule  insisted  on 
by  counsel  and  that  which  we  recognize  as  governing  this  point  in  the 
case. 

In  our  opinion,  however,  counsel  are  entirely  at  fault  in  their  con- 
tention that  the  action  brought  in  this  case  was  on  the  "common 
."  The  principle  is  this:  If  the  declaration  or  petition  sets 
forth  the  contract  on  which  the  recovery  is  sought,  then,  in  order  to 
take  advantage  of  the  statute,  it  musl  l>e  pleaded.  In  such  a  case  the 
defendant  is  put  upon  full  notice  of  the  demand  of  the  plaintiff,  the 
of  the  demand,  and  the  form  in  which  it  exists.  But  where 
the  declaration  or  petition  is  founded  upon  a  "common  count"  (and,  in 

Using  the  term  "o.nmion  count,"  common-law  pleading  is  referred  to), 

such  as  assumpsit  for  goods  sold  and  delivered,  the  nature  of  the  claim 
is  not  exhibited,  and  the  defendant  can  avail  himself  of  the  statute 


~S  FORMATION    OF    CONTRACT — STATUTE    OF    FRAUDS 

without  formal  pleading;  for  in  that  case  it  is  not  to  he  presumed 
that  the  defendant  has  notice  of  the  character  of  the  debt,  which  is 
not  disclosed  by  the  declaration.  The  common  count  referred  to  bears 
no  resemblance  to  the  statutory  form  of  an  action  on  an  open  account 
under  the  laws  of  this  state. 

In  the  case  under  consideration  the  defendants  were  put  upon  no- 
tice that  plaintiff  claimed  that  defendants'  intestate  was  due  it  a  cer- 
tain sum  of  money,  exceeding  $50,  for  two  articles  of  merchandise 
bought  by  the  intestate  at  a  particular  date,  and  that  the  form  of  indebt- 
edness was  an  open  account ;  that  is,  unliquidated.  To  avail  himself 
of  the  privilege  of  the  statute  in  such  a  suit,  the  defendant  must  plead 
it,  or  he  will  be  held  to  have  waived  it,  because  the  defendant  has  the 
personal  privilege  to  plead  it  or  waive  it,  and  if  he  does  not  do  one 
he  does  the  other.  He  did  not  plead  the  statute  in  this  case,  and  inas- 
much as  the  defense  was  not  made  on  the  trial,  or  necessarily  passed 
on  in  a  legal  way  by  the  trial  judge,  the  question  as  to  whether  the 
contract  was  void,  as  being  within  the  statute  of  frauds,  could  not 
properly  have  been  considered  by  this  court.  Motion  for  rehearing 
denied.    All  the  justices  concurring. 


EFFECT    IN    PASSING    PROPERTY — SPECIFIC    GOODS  Ti) 


EFFECT   OF  THE  CONTRACT  IN   PASSING   THE   PROP- 
ERTY—SALE OF  SPECIFIC  GOODS 

I.  In  General 1 


LINGHAM  v.  EGGLESTON. 

(Supreme  Court  of  Michigan,  1S73.     27  Mich.  324.) 

Cooley,  J.  The  contest  in  this  case  relates  to  a  sale  of  lumber 
by  Eggleston  to  Lingham  &  Osborne,  and  the  question  involved  is, 
whether  the  contract  between  the  parties  amounted  to  a  sale  in  prsesenti 
and  passed  the  title,  or  merely  to  an  executory  contract  of  sale.  The 
lumber,  subsequent  to  the  contract  and  before  actual  delivery  to  the 
purchasers,  was  accidentally  destroyed  by  fire,  and  the  purchasers 
now  refuse  to  pay  for  it,  on  the  ground  that  it  never  became  their 
property.  The  action  was  brought  by  Eggleston  for  goods  bargained 
and  sold,  and  in  the  court  below  he  recovered  judgment. 

There  appears  to  be  very  little  dispute  about  the  facts.  The  lumber 
was  piled  in  Eggleston's  mill  yard  at  Birch  Run.  In  September,  1871, 
he  sold  his  mill  to  a  Mr.  Thayer,  reserving  the  right  to  leave  the  lum- 
ber in  the  yard  until  he  disposed  of  it.  To  most  of  the  lumber  the 
plaintiff  had  an  exclusive  title;  but  there  were  four  or  five  piles  which 
he  owned  jointly  with  one  Robinson.  The  whole  amount  was  from 
200.000  to  250,000  excluding  Robinson's  share  in  the  four  or  five  piles. 
The  defendants  went  to  the  mill  yard  September  23,  1871,  and  pro- 
posed to  buy  the  lumber.  Plaintiff  went  through  the  yard  with  them, 
pointed  out  the  several  piles,  and  designated  those  in  which  Robinson 
had  an  undivided  interest,  and  also  some  piles  of  shingles  which  they 
ed  to  take  with  the  lumber.  After  examining  the  whole  to  their 
satisfaction,  the  defendant  agreed  upon  a  purchase,  and  the  following 
written  contract  was  entered  into: 

"Flint.  September  23,  1871. 

"Lingham  &  Osborne  bought  from  C.  Eggl<  ston  this  day.  all  the 
pine  lumber  on  his  yard  at  Birch  Run  at  the  following  prices:  For 
all  common,  eleven  dollars,  and  to  ini  lude  all  better  at  the  same  price ; 
and  for  all  culls,  five  dollars  and  fifty  cents  per  ML,  to  be  paid  for  as 
follows:  Five  hundred  dollars  to  day,  and  five  hundred  dollars  on  the 
of  l  '  tober  next;  the  balance,  one  half  on  lsl  day  of  January, 
A.  D.   1872,  and  the   r<  the   firsl   day  of    February   following; 

:  lumber  to  be  delivered  by  said  Eggle  ton  on  board  of  cars  when 
requested  by  said  Lingham  &  Osborne,  which  shall  not  he  later  than 

i  For  Hi  en    Ion  of  principl<    .    ee  Tiffany,  Bales  (2d  Ed.)  |  12. 


SO  EFFECT   IN   PASSING    PROPERTY — SPECIFIC    GOODS 

10th  of  November  next.     Also  some  shingles  at  two  dollars  per  M. 
for  No.  2  and  four  dollars  for  No.  1. 

"[Signed]     Lingham  &  Osborne. 

"Chauncey  Eggleston,  Jr." 

The  five  hundred  dollars  mentioned  in  this  contract  to  be  paid  at  the 
time  of  its  execution  was  paid.  A  few  days  later  defendants  went 
to  the  mill  yard  in  plaintiff's  absence  and  loaded  two  cars  with  the 
lumber.  He  returned  before  they  had  taken  them  away,  and  helped 
them  count  the  pieces  on  the  cars,  but  left  them  to  measure  them 
afterwards.  At  this  time  the  lumber  in  the  piles  had  not  been  as- 
sorted, inspected  or  measured.  There  was  disagreement  between  the 
parties  as  to  whether  they  had  fixed  upon  a  person  to  inspect  the  lum- 
ber; the  defendants  claiming  that  such  was  the  fact.  On  the  ninth 
day  of  October,  1871,  Lingham  met  plaintiff  on  the  cars  at  Flint,  and 
told  him  the  fires  were  raging  near  Birch  Run ;  that  the  lumber  yard 
was  safe  yet,  but  that  there  were  eight  cars  standing  on  the  side 
track,  and  he  had  better  go  up  to  Birch  Run  and  load  what  were 
there,  and  get  what  lumber  he  could  away;  plaintiff  took  the  first 
train  for  the  purpose,  and  while  on  the  train  the  train  boy  gave  him 
the  following  note  from  Lingham : 

"Holly.  Mr.  Eggleston :  You  may  load,  say  ten  thousand,  if  you 
think  best,  on  each  car,  and  we  can  have  it  inspected  as  it  is  unloaded. 
I  will  try  and  come  up  to-morrow." 

When  plaintiff  reached  Birch  Run  the  fire  was  raging  all  about  the 
mill,  and  that,  with  all  the  lumber  in  the  yard,  was  soon  totally  de- 
stroyed by  fire.  Such  are  the  undisputed  facts  in  the  case ;  and  upon 
these  the  jury  were  instructed  in  substance  that  a  completed  contract 
of  sale  was  made  out,  and  the  plaintiff  was  entitled  to  recover  the  pur- 
chase price. 

Where  no  question  arises  under  the  statute  of  frauds,  and  the  rights 
of  creditors  do  not  intervene,  the  question  whether  a  sale  is  completed 
or  only  executory,  must  usually  be  determined  upon  the  intent  of  the 
parties  to  be  ascertained  from  their  contract,  the  situation  of  the  thing 
sold,  and  the  circumstances  surrounding  the  sale.  The  parties  may 
'settle  this  by  the  express  words  of  their  contract,  but  if  they  fail  to 
do  so,  we  must  determine  from  their  acts  whether  the  sale  is  complete. 
If  the  goods  sold  are  sufficiently  designated  so  that  no  question  can 
arise  as  to  the  thing  intended,  it  is  not  absolutely  essential  that  there 
should  be  a  delivery,  or  that  the  goods  should  be  in  deliverable  condition, 
or  that  the  quantity  or  quality,  when  the  price  depends  upon  either 
or  both,  should  be  determined.  All  these  circumstances  have  an  im- 
portant bearing  when  we  are  seeking  to  arrive  at  the  intention  of  the 
parties,  but  no  one  of  them,  nor  all  combined  are  conclusive. 

In  Blackburn  on  Sales,  120,  the  rule  on  this  subject  is  very  clearly 
and  correctly  stated  as  follows :  The  question,  the  author  says,  is  "a 
question  depending  upon  the  construction  of  the  agreement;  for  the 
law  professes  to  carry  into  effect  the  intention  of  the  parties  as  ap- 


IN   GENERAL  81 

pearing  from  the  agreement,  and  to  transfer  the  property  when  such 
is  the  intention  of  the  agreement;  not  before.  In  this,  as  in  other 
cases,  the  parties  are  apt  to  express  their  intentions  obscurely ;  very 
often  because  the  circumstances  rendering  the  point  of  importance 
are  not  present  to  their  minds,  so  that  they  really  had  no  intention  to 
express.  The  consequence  is,  that  without  absolutely  losing  sight  of 
the  fundamental  point  to  be  ascertained,  the  courts  have  adopted  cer- 
tain rules  of  construction  which,  in  their  nature,  are  more  or  less  tech- 
nical. Some  of  them  seem  very  well  fitted  to  aid  the  court  in  discov- 
ering the  intention  of  the  parties ;  the  substantial  sense  of  others  may 
be  questioned.  The  parties  do  not  contemplate  a  bargain  and  sale 
till  the  specific  goods  on  which  their  contract  is  to  attach  are  agreed 
upon.  Where  the  goods  are  ascertained,  the  parties  are  taken  to  con- 
template an  immediate  bargain  and  sale  of  the  goods,  unless  there  be 
something  to  indicate  an  intention  to  postpone  the  transference  of  thr 
property  till  the  fulfillment  of  any  conditions;  and  when  by  the  agree 
ment  the  seller  is  to  do  any  thing  to  the  goods  for  the  purpose  of  put- 
ting them  into  a  deliverable  shape,  or  when  any  thing  is  to  be  done 
to  them  to  ascertain  the  price,  it  is  presumed  that  the  parties  mean  to 
make  the  performance  of  those  things  a  condition  precedent  to  the 
transfer  of  the  property.  But  as  these  are  only  rules  for  the  con- 
struction of  the  agreement,  they  must  yield  to  any  thing  in  the  agree- 
ment which  clearly  shows  a  contrary  intention.  The  parties  may  law- 
fully agree  to  an  immediate  transference  of  the  property  in  the  goods, 
although  the  seller  is  to  do  many  things  to  them  before  they  are  to  be 
delivered;  and,  on  the  other  hand,  they  may  agree  to  postpone  the 
vesting  of  the  property  till  after  the  fulfillment  of  any  conditions  they 
please." 

In  Benjamin  on  Sales,  214,  215,  the  same  doctrine  is  laid  down,  and 
it  is  said  that  "nothing  prevents  the  parties  from  agreeing  that  the 
property  in  a  specific  thing  sold  and  ready  for  delivery  is  not  to  pass 
till  certain  conditions  are  accomplished,  or  that  the  property  shall 
pass  in  a  thing  which  remains  in  the  vendor's  possession,  and  is  not 

ly  for  delivery,  as  an  unfinished  ship,  or  which  has  not  yet  been 

-died  or  measured,  as  a  cargo  of  corn  in  hulk,  sold  at  a  certain 
price  per  pound  or  per  bushel."     And  see  Id.  221  et  seq. 

pon  this  general  principle  there  is  no  difficulty  in  reconciling  most 
of  the  reported  . '  And  even  without  express  words  to  that 

Ct,  a  contract  has  often  been  held  to  be  a  completed  sale,  where 
many  circumstances   ware  wantin  I  many  thi  i  be  done  by 

one  or  both  the  parties  to  fix  conclusively  the  sum  to  be  paid  or  to 

rmine  some  othi  material  to  their  re  pective  rights. 

The  most  important  fact  indicative  of  an  intent   that  title  shall  pass 

is  generally  that  of  delivery.     If  the  goods  1"'  completely  delivered  to 

the  pur  -,  it  is  usually  very  strong  if  not  conclusive  evidence  of 

intent  that  the  property     hall  ve  i  in  him  and  he  at  his  risk,  notwith- 

Oooi  i  i  '  a; 


^2  EFFECT   IN   PASSING    PROPERTY — SPECIFIC    GOODS 

standing  weighing,  measuring,  inspection,  or  some  other  act  is  to  be 
done  afterwards.  A  striking  case  in  illustration  is  that  of  Young  v. 
Mathews,  Law  R.  2  Exch.  127,  where  a  large  quantity  of  bricks  was 
purchased  in  kilns.  Only  a  part  of  them  were  burned,  and  none  of 
them  were  counted  out  from  the  rest;  but  they  were  paid  for,  and 
such  delivery  as  in  the  nature  of  the  case  was  practicable  was  made. 
The  court  held  that  the  question  was  one  of  intention  merely,  and 
that  it  was  evident  the  parties  intended  the  title  to  pass.  To  the  same 
effect  are  Woods  v.  Russell,  5  B.  &  Aid.  942;  Riddle  v.  Varnum,  20 
Pick.  (Mass.)  280;  Bates  v.  Conkling,  10  Wend.  (N.  Y.)  389;  Oly- 
phant  v.  Baker,  5  Denio  (N.  Y.)  379 ;  Bogy  v.  Rhodes,  4  G.  Greene 
(Iowa)  133;  Crofoot  v.  Bennett,  2  N.  Y.  258;  Cunningham  v.  Ash- 
brook,  20  Mo.  553. 

So,  if  the  goods  are  specified,  and  all  that  was  to  be  done  by  the 
vendor  in  respect  thereto  has  been  done,  the  title  may  pass,  though 
the  quantity  and  quality,  and  consequently  the  price  to  be  paid,  are 
still  to  be  determined  by  the  vendee.  Turley  v.  Bates,  2  H.  &  C.  200 ; 
Kohl  v.  Lindley,  39  111.  195,  89  Am.  Dec.  294. 

And  even  if  something  is  to  be  done  by  the  vendor,  but  only  when 
directed  by  the  vendee  and  for  his  convenience,  as,  for  instance,  to 
load  the  goods  upon  a  vessel  for  transportation,  the  property  may  pass 
by  the  contract  of  sale  notwithstanding.  Whitcomb  v.  Whitney,  24 
Mich.  486;  Terry  v.  Wheeler,  25  N.  Y.  520. 

But  the  authorities  are  too  numerous  and  too  uniform  to  justify  ci- 
tation, which  hold  that  where  anything  is  to  be  done  by  the  vendor, 
or  by  the  mutual  concurrence  of  both  parties,  for  the  purpose  of  as- 
certaining the  price  of  the  goods,  as  by  weighing,  testing  or  measur- 
ing them,  where  the  price  is  to  depend  upon  the  quantity  or  quality  of 
the  goods,  the  performance  of  those  things  is  to  be  deemed  pre- 
sumptively a  condition  precedent  to  the  transfer  of  the  property,  al- 
though the  individual  goods  be  ascertained,  and  they  are  in  the  state 
in  which  they  may  and  ought  to  be  accepted. 

A  learned  author  from  whom  we  have  already  quoted,  says  of  this, 
that  "the  rule  seems  to  be  somewhat  hastily  adopted  from  the  civil 
law,  without  adverting  to  the  great  distinction  made  by  the  civilians 
between  a  sale  for  a  certain  price  in  money,  and  an  exchange  for  any 
thing  else.  The  English  law  makes  no  such  distinction,  but,  as  it 
seems,  has  adopted  the  rule  of  the  civil  law,  which  seems  to  have  no 
foundation  except  in  the  distinction.  In  general  the  weighing,  etc., 
must,  in  the  nature  of  things,  be  intended  to  be  done  before  the  buyer 
takes  possession  of  the  goods;  but  that  is  quite  a  different  thing  from 
intending  it  to  be  done  before  the  vesting  of  the  property ;  and  as  it 
must  in  general  be  intended  that  both  the  parties  shall  concur  in  the 
act  of  weighing,  when  the  price  is  to  depend  upon  the  weight,  there 
seems  little  reason  why,  in  cases  in  which  the  specific  goods  are  agreed 
upon,  it  should  be  supposed  to  be  the  intention  of  the  parties  to  render 
the  delay  of  that  act,  in  which  the  buyer  is  to  concur,  beneficial  to 


IN    GENERAL  83 

him.  Whilst  the  price  remains  unascertained,  the  sale  is  clearly  not 
for  a  certain  sum  of  money,  and  therefore  does  not  come  within  the 
civilian's  definition  of  a  perfect  sale,  transferring  the  risk  and  gain 
of  the  thing  sold ;  but  the  English  law  does  not  require  that  the  con- 
sideration for  a  bargain  and  sale  should  be  in  moneys  numbered,  pro- 
vided they  be  of  value."  But  the  same  writer,  with  candor  and  jus- 
tice, adds,  that  this  rule  is  now  "firmly  established  as  English  law." 
Blackburn  on  Sales,  153.  And  see  Turley  v.  Bates,  2  H.  &  C.  200, 
in  which  this  passage  is  quoted  and  the  conclusion  treated  as  unques- 
tionable. 

What  then  are  the  facts  in  this  case  from  which  the  intent  of  the 
parties  is  to  be  inferred?  The  lumber  was  specifically  designated,  so 
that  no  question  of  identity  could  arise.  It  was  not  delivered,  and 
the  vendor  was  to  place  it  on  board  the  cars,  if  desired  to  do  so  within 
a  time  specified ;  but  as  in  any  event  the  vendees  were  to  take  it  at 
Birch  Run.  and  it  was  optional  with  them  to  load  it  on  the  cars  them- 
selves or  to  have  the  vendor  do  it  for  them,  and  they  had  no  right  to 
require  that  he  should  do  so  after  the  day  named,  we  think  the  cir- 
cumstance that  actual  delivery  was  not  made  is  not  one  of  very  much 
importance  in  the  present  discussion.  What  is  of  more  importance  is. 
that  neither  the  quality  nor  the  quantity  was  determined ;  and  the  evi- 
dence in  the  case  shows  that  as  to  these  there  might  very  well  be, 
and  actually  were  great  differences  of  opinion.  The  price  to  be  paid 
was  consequently  not  ascertained,  and  could  not  be  until  the  qualities 
were  separated  and  measurement  had. 

It  will  be  observed  that  the  contract  did  not  provide  how  or  by 
whom  the  inspection  and  measurement  should  be  made.  It  was  cer- 
tainly not  the  right  of  either  party  to  bind  the  other  party  by  an  in- 
spection and  measurement  of  his  own  ;  it  was  the  right  of  both  to 
participate,  and  we  must  suppose  such  was  the  intent  unless  some- 
thing clearly  appears  in  the  case  to  show  the  contrary.  Nothing  of 
that  nature  appears  in  the  record  except  the  disputed  evidence  of  de- 
fendants, that  a  person  was  agreed  upon  for  the  purpose.  The  note 
■  by  Lingham  to  Eggleston  proposing  that  the  eight  cars  be  loaded 
and  that  the  vendees  make  the  proper  inspection,  was  a  mere  proposi- 
.  and  never  acted  upon.  It  is  very  evidenl  Eggleston  was  under 
no  ol  to  trusl    tin's   important  transaction   exclusively   to  the 

ven-'  d  we  have  no  righl  to  infer  thai  If  would  have  <1< 

It   follows  thai  something  of  high  importance  remained  to  lie  dot 
by  ili'-  vendor  to  tain  the  price  to  be  paid;    and  as  this,  un 

all  tli"  authorities,  was  presumptively  a  condition  precedenl  to  the 
tran  of  Lhe  title — nothin  ■  to  the  contrary  appearing — the  court 

ructed  the  jury.     The  instructions  given  were  in 
to  the  contrary.     It  follows  that  the  judgment  must 
be  reversed,  with  costs,  and  a  new  trial  ordered. 


yJ:  EFFECT   IN   PASSING   PROPERTY — SPECIFIC    GOODS 

BERGAN  v.  MAGNUS  et  al. 
(Supreme  Court  of  Georgia,  1S9G.    98  Ga.  514,  25  S.  E.  570.) 

Attachment  by  M.  T.  Bergan  against  one  Allen,  in  which  a  claim 
to  the  property  seized  was  interposed  by  J.  A.  Magnus  &  Co.  From  a 
judgment  for  claimants,  plaintiff  brings  error. 

Lumpkin,  J.  An  attachment  in  favor  of  Bergan  against  Allen 
was  levied  upon  a  barrel  of  whisky,  a  claim  to  which  was  interposed 
by  Magnus  &  Co.  The  plaintiff's  theory  was  that  the  whisky  had  been 
sold  by  the  claimants  to  Allen,  and  that  the  title  had  passed  into  the 
latter  before  the  attachment  was  levied.  On  the  other  hand,  the  con- 
tention of  the  claimants  was  that,  under  the  terms  of  the  contract  be- 
tween themselves  and  Allen,  the  sale  had  never  become  complete,  and 
that  he  had  never  acquired  title.  There  was  some  question  as  to 
whether  or  not  Allen  had  ever  obtained  possession  of  the  whisky,  the 
claimants  insisting  that  they  had  exercised  their  right  of  stoppage  in 
transitu,  and  the  plaintiff  denying  that  this  was  true.  In  the  view  we 
take  of  the  case,  however,  this  question  is  immaterial ;  for,  even  upon 
the  assumption  that  Allen  actually  obtained  possession,  we  are  of  the 
opinion  that  the  judge,  who  tried  the  case  without  a  jury,  rightly 
found  for  the  claimants.  The  evidence  fully  and  amply  warranted 
him  in  reaching  the  conclusion  that  the  sale  from  Magnus  &  Co.  to 
Allen  was  for  cash,  which  the  latter  was  to  pay  upon  delivery  of  the 
whisky,  and  that  prepayment  of  the  price  was  a  condition  precedent 
to  the  sale. 

There  was  no  pretense  that  Allen  had  paid  the  price.  This  being 
so,  even  if  Allen  had  in  fact  obtained  possession,  the  title  did  not  pass 
to  him  under  the  contract,  for  the  reason  that  he  failed  to  comply 
with  the  condition  upon  which  the  sale  depended.  "If  the  sale  be  for 
money  to  be  immediately  paid,  or  to  be  paid  upon  delivery,  payment  of 
the  price  is  a  precedent  condition  of  the  sale,  which  suspends  the  com- 
pletion of  the  contract  until  the  condition  is  performed,  and  prevents 
the  right  of  property  from  passing  to  the  vendee,  unless  the  vendor 
chooses  to  trust  to  the  personal  credit  of  the  vendee."  The  foregoing 
is  an  extract  from  the  opinion  of  Washington,  J.,  delivered  in  the  case 
of  Copland  v.  Bosquet,  4  Wash.  C.  C.  588,  Fed.  Cas.  No.  3,212,  cited 
in  1  Benj.  Sales,  §  336.  To  the  same  effect,  see  Tied.  Sales,  §  206.  In 
Dows  v.  Dennistoun,  28  Barb.  (N.  Y.)  393,  it  appeared  that  certain 
flour  had  been  sold  for  cash  on  delivery;  that  is,  the  cash  was  to  be 
paid  within  10  days.  Upon  these  facts,  Davies,  P.  J.,  remarked :  "The 
very  terms  and  import  of  this  arrangement  are  that  there  was  to  be  a 
qualified  delivery,  which  was  to  precede  the  payment;  and  it  is  ap- 
parent from  the  facts  in  this  case  that  the  possession  of  the  goods 
was  intrusted  to  the  vendee  for  the  purpose  of  enabling  him  to  realize 
upon  them,  and  thus  provide  means  for  the  payment  of  the  price. 
Such  an  understanding,  arrangement,  or  custom  cannot,  we  think,  be 


RULES   FOB   ASCERTAINING   INTENTION  So 

construed  into  an  absolute  transfer  of  the  title  to  the  property,  as  be- 
tween the  original  parties  to  it  or  those  who  have  no  greater  equities 
than  the  original  parties." 

The  same  doctrine  was  recognized  in  Harding  v.  Metz,  1  Tenn.  Ch. 
610,  in  which  it  was  held  that  "if  personal  chattels  be  sold  upon  the 
express  condition  that  they  are  to  be  paid  for  on  delivery,  and  they  are 
delivered  upon  the  faith  that  the  condition  will  be  immediately  per- 
formed, and  performance  is  refused  upon  demand  in  a  reasonable  time, 
no  title  passes  to  the  buyer."  And  see  Armour  v.  Pecker,  123  Mass. 
143;  Salomon  v.  Hathaway,  126  Mass.  482;  Mathewson  v.  Mills  Co., 
76  Ga.  357.    Judgment  affirmed. 


II.  Rules  for  Ascertaining  Intention  2 


LINGHAM  v.  EGGLESTON. 

(Supreme  Court  of  Michigan,  1ST3.     27  Mich.  324.) 
See  ante,  p.  79,  for  a  report  of  the  case. 


RESTAD  v.  ENGEMOEN. 

(Supreme  Court  of  Minnesota,  1S9G.     65  Minn.  14S,  67  N.  W.  1146.) 

Action  by  Peter  Restad  against  Half  dan  Engemoen.  From  a  judg- 
ment for  plaintiff,  defendant  appeals. 

Canty,  J.  This  action  was  brought  to  recover  $38.41,  the  price 
of  a  cow  and  a  steer  which  plaintiff  alleges  he  sold  to  defendant. 
Plaintiff  had  a  verdict,  and  from  the  judgment  entered  thereon  de- 
fendant appeals. 

Plaintiff  testified  that  about  March  1,  1892,  defendant  came  to  his 

n,  looked  at  the  cow  and  the  steer,  and  agreed  to  give  him  2  cents  per 

pound  for  the  cow  and  2.35  cents  per  pound  for  the  steer,  paid  him 

on  the  cow  and  SI  on  the  steer,  and  asked  him  t<»  keep  them,  and 

corn  and  potatoes,  until   April  26th   following,  and  then  to 

deliver  them  to  defendant  at   Pelican  Rapids,  a  town  some  distance 

from  the   farm;    thai  plaintiff  did  so  keep,  feed,  and  deliver  them,  hut 

that  defendant  refu  ed  to  i  them.    Thereupon  plaintiff  weighed 

them,  and  thereb  rtained  the  amount  of  the  purchase  price.     De 

fendanl  testified  that  he  told  plaintiff  that  he  would  take  the  cattle 
at  the  price  specified  if  plaintiff  would  "\m\  them  up  to  beef."    Said 

the  witn<  "I    told   him    I    could  not    handle  COWS  at   all  unless  the, 

were  fed  up  to  beef.     *     *     *     They  were  very  poor.    I  could  no! 
2  For  -I  "n  of  princi]  'i  Iffany,  Sales  (2d  Ed.)  S  18. 


86  EFFECT  IN   PASSING   PEOPEETY — SPECIFIC   GOODS 

take  them  because  they  were  not  fed  up  to  beef."  Plaintiff  testified 
that  defendant  merely  told  him  to  feed  "them  a  little  potatoes  and 
corn,  but  don't  give  them  too  much  any  of  the  time,"  and  denies  that 
he  agreed  to  fatten  them. 

We  are  of  the  opinion  that  the  evidence  does  not  sustain  the  ver- 
dict and  judgment.  In  Martin  v.  Hurlbut,  9  Minn.  142  (Gil.  132),  the 
following  extract  is  quoted  with  approval  from  Joyce  v.  Adams,  8 
X.  Y.  291 :  "It  is  a  general  rule  of  law  that,  where  a  contract  is 
made  for  the  purchase  of  goods,  and  nothing  is  said  about  payment 
or  delivery,  the  property  passes  immediately,  so  as  to  cast  upon  the 
purchaser  all  future  risk,  if  nothing  further  remains  to  be  done  to 
the  goods,  although  he  cannot  take  them  away  without  paying  the 
price.  But,  if  anything  remains  to  be  done  on  the  part  of  the  seller, 
as  between  him  and  the  buyer,  such  as  weighing,  measuring,  or  count- 
ing out  of  a  common  parcel,  before  the  goods  purchased  are  to  be  de- 
livered, until  that  is  done  the  right  of  property  has  not  attached  in 
the  buyer."  See,  also,  Rail  v.  Lumber  Co.,  47  Minn.  422,  50  N.  W. 
471.  In  Benj.  Sales  (book  2)  c.  3,  one  of  Lord  Blackburn's  rules  is 
stated  as  follows :  "First.  Where,  by  the  agreement,  the  vendor  is 
to  do  anything  to  the  goods  for  the  purpose  of  putting  them  into  that 
state  in  which  the  purchaser  is  to  be  bound  to  accept  them,  or,  as  it 
is  sometimes  worded,  'into  a  deliverable  state,'  the  performance  of 
those  things  shall,  in  the  absence  of  circumstances  indicating  a  con- 
trary intention,  be  taken  to  be  a  condition  precedent  to  the  vesting"  of 
the  property." 

In  the  present  case  there  were  altogether  too  many  things  to  be 
done  by  the  vendor  to  the  chattels  before  delivery,  and  too  few  cir- 
cumstances indicating  an  intention  to  vest  title  immediately,  so  that 
a  finding  that  such  intention  existed  cannot  be  sustained.  Plaintiff's 
remedy  was  an  action  for  damages  for  a  breach  of  the  executory  con- 
tract.    Judgment  reversed,  and  a  new  trial  granted. 


III.  Reservation  of  Right  of  Possession  or  Property  8 

1.  Conditional  Sales 


HARKNESS  v.  RUSSELL  &  CO. 

(Supreme  Court  of  United  States.  1886.     118  U.  S.  6G3,  7  Sup.  Ct.  51, 

30  L.  Ed.  285.) 

Bradley,  J.4    This  is  an  appeal  from  the  supreme  court  of  Utah. 
The  action  was  brought  in  the  district  court  for  Weber  county,  to  re- 

3  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  44. 
*  Part  of  the  opinion  is  omitted. 


RESERVATION    OF   RIGHT   OF   POSSESSION   OR  PROPERTY  8  * 

cover  the  value  of  two  steam-engines  and  boilers,  and  a  portable  saw- 
mill connected  with  each  engine.  A  jury  being  waived,  the  court 
found  the  facts,  and  rendered  judgment  for  the  plaintiff,  Russell  & 
Co.  The  plaintiff  is  an  Ohio  corporation,  and  by  its  agent  in  Idaho, 
on  the  second  of  October,  1882,  agreed  with  a  partnership  firm  by  the 
name  of  Phelan  &  Ferguson,  residents  of  Idaho,  to  sell  to  them  the 
said  engines,  boilers,  and  saw-mills  for  the  price  of  $4,98S,  nearly 
all  of  which  was  secured  by  certain  promissory  notes,  which  severally 
contained  the  terms  of  the  agreement  between  the  parties.  One  of  the 
notes  (the  others  being  in  the  same  form)  was  as  follows,  to-wit : 

"Salt  Lake  City,  October  2,  1882. 

"On  or  before  the  first  day  of  May,  1883.  for  value  received  in  one 
sixteen-horse  portable  engine,  No.  1,026,  and  one  portable  saw-mill. 
No.  128,  all  complete,  bought  of  L.  B.  Mattison,  agent  of  Russell  & 
Co.,  we,  or  either  of  us.  promise  to  pay  to  the  order  of  Russell  & 
Co..  Massillon,  Ohio,  $300,  payable  at  Wells,  Fargo  &  Co.'s  bank,  Salt 
Lake  City,  Utah  Territory,  with  ten  per  cent,  interest  per  annum 
ii  October  1.  1882,  until  paid,  and  reasonable  attorney's  fees,  or 
any  costs  that  may  be  paid  or  incurred  in  any  action  or  proceeding 
instituted  for  the  collection  of  this  note  or  enforcement  of  this  cove- 
nant. The  express  condition  of  this  transaction  is  such  that  the  title. 
ownership,  or  possession  of  said  engine  and  saw-mill  does  not  pass 
from  the  said  Russell  &  Co.  until  this  note  and  interest  shall  have 
been  paid  in  full,  and  the  said  Russell  &  Co.  or  his  agent  has  full 
power  to  declare  this  note  due,  and  take  possession  of  said  engine 
and  saw-mill  when  they  may  deem  themselves  insecure,  even  before 
the  maturity  of  this  note;  and  it  is  further  agreed  by  the  makers 
hereof  that  if  said  note  is  not  paid  at  maturity,  that  the  interest  shall 
be  two  per  cent,  per  month  from  maturity  hereof  till  paid,  both  before 
and  after  judgment,  if  any  should  be  rendered.  In  case  said  saw- 
mill and  engine  shall  be  taken  back,  Russell  &  Co.  may  sell  the  same 
at  public  or  private  sale  without  notice,  or  they  may,  without  sale. 
indorse  the  true  value  <>\  the  property  on  this  note,  and  we  agree  to  pay 
on  the  note  any  balance  due  thereon,  after  such  indorsement,  as  dam- 
and  rental  for  .aid  machinery.  As  to  this  debt  we  waive  the  right 
npt,  or  claim  a-  e  :empt,  any  property,  real  <>r  personal,  we  now 
own,  or  may  hereafter  acquire,  by  virtue'  of  any  homestead  or  exemp- 
tion law,  state  or  federal,  now  in  force,  or  that  hereafter  may  he 
enacted. 

"P.  '  >.,  Oxford,  Oneida   County,    blaho  Territory. 
"$3l  I  'helan  &  Bergu  on." 

Some  of  the  notes  were  given  for  the  price  of  one  ol  the  engines 
with  it-  accompanying  boiler  and  mill,  and  the  others  for  the  price  o\ 
the  other.  Some  of  the  notes  were  paid;  and  the  present  suit  was 
brought  on  those  thai  were  nol  paid.  The  property  was  delivered  to 
Phelan  ft  Ferguson  on  thi  ution  of  the  notes,  ami  subsequently 


88  EFFECT   IN   PASSING   PROPERTY — SPECIFIC   GOODS 

they  sold  it  to  the  defendant  Harkness,  in  part  payment  of  a  debt 
due  from  them  to  him  and  one  Langsdorf.  The  defendant,  at  the 
time  of  the  sale  to  him,  knew  that  the  purchase  price  of  the  property 
had  not  been  paid  to  the  plaintiff,  and  that  the  plaintiff  claimed  title 
thereto  until  such  payment  was  made.  The  unpaid  notes  given  for  each 
eneine  and  mill  exceeded  in  amount  the  value  of  such  engine  and 
mill  when  the  action  was  commenced. 

The  territory  of  Idaho  has  a  law  relating  to  chattel  mortgages,  re- 
quiring that  every  such  mortgage  shall  set  out  certain  particulars  as 
to  parties,  time,  amount,  etc.,  with  an  affidavit  attached  that  it  is  bona 
fide,  and  made  without  any  design  to  defraud  and  delay  creditors; 
and  requiring  the  mortgage  and  affidavit  to  be  recorded  in  the  county 
where  the  mortgagor  lives,  and  in  that  where  the  property  is  located ; 
and  it  is  declared  that  no  chattel  mortgage  shall  >e  valid  (except  as 
between  the  parties  thereto)  without  compliance  with  these  requisites, 
unless  the  mortgagee  shall  have  actual  possession  of  the  property 
mortgaged.  In  the  present  case  no  affidavit  was  attached  to  the  notes, 
nor  were  they  recorded. 

The  court  found  that  it  was  the  intention  of  Phelan  &  Ferguson  and 
of  Russell  &  Co.  that  the  title  to  the  said  property  should  not  pass 
from  Russell  &  Co.  until  all  the  notes  were  paid.  Upon  these  facts 
the  court  found,  as  conclusions  of  law,  that  the  transaction  between 
Phelan  &  Ferguson  and  Russell  &  Co.  was  a  conditional  or  executory 
sale,  and  not  an  absolute  sale  with  a  lien  reserved,  and  that  the  title 
did  not  pass  to  Phelan  &  Ferguson,  or  from  them  to  the  defendant, 
and  gave  judgment  for  the  plaintiff.  The  supreme  court  of  the  ter- 
ritory affirmed  this  judgment. 

The  first  question  to  be  considered  is  whether  the  transaction  in 
question  was  a  conditional  sale  or  a  mortgage;  that  is,  whether  it 
was  a  mere  agreement  to  sell  upon  a  condition  to  be  performed,  or  an 
absolute  sale,  with  a  reservation  of  a  lien  or  mortgage  to  secure  the 
purchase  money.  If  it  was  the  latter,  it  is  conceded  that  the  lien  or 
mortgage  was  void  as  against  third  persons,  because  not  verified  by 
affidavit,  and  not  recorded  as  required  by  the  law  of  Idaho.  But,  so 
far  as  words  and  the  express  intent  of  the  parties  can  go,  it  is  per- 
fectly evident  that  it  was  not  an  absolute  sale,  but  only  an  agree- 
ment to  sell  upon  condition  that  the  purchasers  should  pay  their  notes 
at  maturity.  The  language  is :  "The  express  condition  of  .this  trans- 
action is  such  that  the  title  *  *  *  does  not  pass  *  *  *  until 
this  note  and  interest  shall  have  been  paid  in  full."  If  the  vendees 
should  fail  in  this,  or  if  the  vendors  should  deem  themselves  insecure 
before  the  maturity  of  the  notes,  the  latter  were  authorized  to  re- 
possess themselves  of  the  machinery,  and  credit  the  then  value  of  it, 
or  the  proceeds  of  it  if  they  should  sell  it,  upon  the  unpaid  notes.  If 
this  did  not  pay  the  notes,  the  balance  was  still  to  be  paid  by  the  mak- 
ers by  way  of  "damages  and  rental  for  said  machinery."    This  stipula- 


RESERVATION    OF   RIGHT   OF   POSSESSION    OR  PROPERTY  89 

tion  was  strictly  in  accordance  with  the  rule  of  damages  in  such 
cases.  Upon  an  agreement  to  sell,  if  the  purchaser  fails  to  execute 
his  contract,  the  true  measure  of  damages  for  its  breach  is  the  differ- 
ence between  the  price  of  the  goods  agreed  on  and  their  value  at 
the  time  of  the  breach  or  trial,  which  may  fairly  be  stipulated  to  be 
the  price  they  bring  on  a  resale.  It  cannot  be  said,  therefore,  that  the 
stipulations  of  the  contract  were  inconsistent  with  or  repugnant  to 
what  the  parties  declared  their  intention  to  be,  namely,  to  make  an 
executory  and  conditional  contract  of  sale.  Such  contracts  are  well 
known  in  the  law  and  often  recognized;  and,  when  free  from  any 
fraudulent  intent,  are  not  repugnant  to  any  principle  of  justice  or  eq- 
uity, even  though  possession  of  the  property  be  given  to  the  proposed 
purchaser.  The  rule  is  formulated  in  the  text-books  and  in  many 
adjudged  cases. 

In  Lord  Blackburn's  Treatise  on  the  Contract  of  Sale,  published  40 
years  ago,  two  rules  are  laid  down  as  established:  (1)  That  where, 
by  the  agreement,  the  vendor  is  to  do  anything  to  the  goods  before 
delivery,  it  is  a  condition  precedent  to  the  vesting  of  the  property; 
(2)  that  where  anything  remains  to  be  done  to  the  goods  for  ascer- 
taining the  price,  such  as  weighing,  testing,  etc.,  this  is  a  condition 
precedent  to  the  transfer  of  the  property.  Blackb.  Sales,  152.  And 
it  is  subsequently  added  that  "the  parties  may  indicate  an  intention,  by 
their  agreement,  to  make  any  condition  precedent  to  the  vesting  of 
the  property ;  and,  if  they  do  so,  their  intention  is  fulfilled."  Blackb. 
Sales,  167. 

Mr.  Benjamin,  in  his  Treatise  on  Sales  of  Personal  Property,  add- 
to  the  two  formulated  rules  of  Lord  Blackburn  a  third  rule,  which  is 
supported  by  many  authorities,  to-wit :  (3)  "Where  the  buyer  is  by  the 
contract  bound  to  do  anything  as  a  condition,  either  precedent  or  con- 
current, on  which  the  passing  of  the  property  depends,  the  property 
will  not  pass  until  the  condition  be  fulfilled,  even  though  the  goods 
may  have  been  actually  delivered  into  the  possession  of  the  buyer." 
j.  Sales,  (2d  l*.d.)  236;  Id.  (3d  Ed.)  §  320.  The  author  cites  for 
proposition  I  v.  Stillito,  2  Barn.  &  Aid.  329,  note  a;  Brandt 

v.  Bowlby,  2  Barn.  &  Adol.  932;  Barrow  v.  Coles,  (Lord  Ellenbor- 
OUgh,)  3  Cam]).  92;  Swain  v.  Shepherd,  (Baron  Parke,)  1  Moody  & 
R.  223;    Mires  v.  Solebay,  2  Mod.  243. 

In  the  last  case,  decided  in  the  time  of  Charles  II.,  one  Alston  took 
sheep  to  pasture  for  a  certain  time,  with  an  agreement  that  if,  at  the 
end  of  that  time,  he  should   pay  the  owner  a  certain  sum,  he   should 
have  the   sheep.     Before  the  time  expired  the  owner  sold  them  to 
»n;    and  it  was  held  that  the  -ale  was  valid,  and  that  the 
ien1  to  -'-11  il  i  p  to  Alston,  if  he  would  pay  for  them  at  a 

certain  day,  did  not  amount  to  a  ale,  hut  only  to  an  agreement.  The 
other  i  e  instances  of  sail     of  goods  to  be  paid  for  in  cadi  or 

Becurities    On    delivery.      It    was   held    that    the    sale,    were    conditional 


DO  EFFECT   IN    PASSING    PROPERTY — SPECIFIC    GOODS 

only,  and  that  the  vendors  were  entitled  to  retake  the  goods,  even 
after  delivery,  if  the  condition  was  not  performed;  the  delivery  being 
considered  as  conditional.  This  often  happens  in  cases  of  sales  by 
auction,  when  certain  terms  of  payment  are  prescribed,  with  a  condi- 
tion that,  if  they  are  not  complied  with,  the  goods  may  be  resold  for 
account  of  the  buyer,  who  is  to  account  for  any  deficiency  between 
the  second  sale  and  the  first.  Snch  was  the  case  of  Lamond  v.  Duvall, 
9  Q.  B.  1030;   and  many  more  cases  could  be  cited.    *    *     * 

This  presumption  of  property  in  a  bankrupt  arising  from  his  pos- 
session and  reputed  ownership  became  so  deeply  imbedded  in  the  Eng- 
lish law  that  in  process  of  time  many  persons  in  the  profession,  not 
adverting  to  its  origin  in  the  statute  of  bankruptcy,  were  led  to  re- 
gard it  as  a  doctrine  of  the  common  law ;  and  hence  in  some  states 
in  this  country,  where  no  snch  statute  exists,  the  principles  of  the 
statute  have  been  followed,  and  conditional  sales  of  the  kind  now 
under  consideration  have  been  condemned  either  as  being  fraudulent 
and  void  as  against  creditors,  or  as  amounting,  in  effect,  to  absolute 
sales  with  a  reserved  lien  or  mortgage  to  secure  the  payment  of  the 
purchase  money.  This  view  is  based  on  the  notion  that  such  sales 
are  not  allowed  by  law,  and  that  the  intent  of  the  parties,  however 
honestly  formed,  cannot  legally  be  carried  out.  The  insufficiency  of 
this  argument  is  demonstrated  by  the  fact  that  conditional  sales  are 
admissible  in  several  acknowledged  cases,  and  therefore  there  cannot 
be  any  rule  of  law  against  them  as  such.  They  may  sometimes  be 
used  as  a  cover  for  fraud ;  and,  when  this  is  charged,  all  the  circum- 
stances of  the  case,  this  included,  will  be  opened  for  the  consideration 
of  a  jury.  Where  no  fraud  is  intended,  but  the  honest  purpose  of  the 
parties  is  that  the  vendee  shall  not  have  the  ownership  of  the  goods 
until  he  has  paid  for  them,  there  is  no  general  principle  of  law  to 
prevent  their  purpose  from  having  effect. 

In  this  country,  in  states  where  no  such  statute  as  the  English  act 
referred  to  is  in  force,  many  decisions  have  been  rendered  sustaining 
conditional  sales  accompanied  by  delivery  of  possession,  both  as  be- 
tween the  parties  themselves  and  as  to  third  persons. 

In  Hussey  v.  Thornton,  4  Mass.  405,  3  Am.  Dec.  224  (decided  in 
180S,)  where  goods  were  delivered  on  board  of  a  vessel  for  the  vendee 
upon  an  agreement  for  a  sale,  subject  to  the  condition  that  the  goods 
should  remain  the  property  of  the  vendors  until  they  received  securi- 
ty for  payment,  it  was  held  (Chief  Justice  Parsons  delivering  the 
opinion)  that  the  property  did  not  pass,  and  that  the  goods  could  not 
be  attached  by  the  creditors  of  the  vendee. 

This  case  was  followed  in  1822  by  that  of  Marston  v.  Baldwin,  17 
Mass.  606,  which  was  replevin  against  a  sheriff  for  taking  goods 
which  the  plaintiff  had  agreed  to  sell  to  one  Holt,  the  defendant  in 
the  attachment ;  but  by  the  agreement  the  property  was  not  to  vest 
in  Holt  until  he  should  pay  $100,  (part  of  the  price,)  which  condition 
was  not  performed,  though  the  goods  were  delivered.     Holt  had  paid 


RESERVATION    OF   EIGHT   OF   POSSESSION    OR   PROPERTY  91 

$75,  which  the  plaintiff  did  not  tender  back.  The  court  held  that  it 
was  sufficient  for  the  plaintiff  to  be  ready  to  repay  the  money  when 
he  should  be  requested,  and  a  verdict  for  the  plaintiff  was  sustained. 

In  Barrett  v.  Pritchard,  2  Pick.  (Mass.)  512,  13  Am.  Dec.  +49,  the 
court  said:  "It  is  impossible  to  raise  a  doubt  as  to  the  intention  of 
the  parties ;  for  it  is  expressly  stipulated  that  'the  wool,  before  man- 
ufactured, after  being"  manufactured,  or  in  any  stage  of  manufacture, 
shall  be  the  property  of  the  plaintiff  until  the  price  be  paid.'  It  is 
difficult  to  imagine  any  good  reason  why  this  agreement  should  not 
bind  the  parties.    *    *    * 

In  Coggill  v.  Hartford  &  N.  H.  R.  Co.,  3  Gray  (Mass.)  545,  the 
rights  of  a  bona  fide  purchaser  from  one  in  possession  under  a  condi- 
tional sale  of  goods  were  specifically  discussed,  and  the  court  held,  in 
an  able  opinion  delivered  by  Mr.  Justice  Bigelow,  that  a  sale  and  de- 
livery of  goods  on  condition  that  the  title  shall  not  vest  in  the  vendee 
until  payment  of  the  price  passes  no  title  until  the  condition  is  per- 
formed, and  the  vendor,  if  guilty  of  no  laches,  may  reclaim  the  prop- 
erty, even  from  one  who  has  purchased  from  his  vendee  in  good  faith, 
and  without  notice.  *     *     * 

This  case  was  followed  in  Sargent  v.  Metcalf,  5  Gray,  306,  66 
Am.  Dec.  368;  Deshon  v.  Bigelow,  8  Gray,  159;  Whitney  v.  Eaton, 
15  Gray.  22?;  Hirschorn  v.  Canney,  98  Mass.  149;  and  Chase  v. 
Ingalls,  122  Mass.  3S1 ;  and  is  believed  to  express  the  settled  law  of 
.Massachusetts. 

The  same  doctrine  prevails  in  Connecticut,  and  was  sustained  in 
an  able  and  learned  opinion  of  Chief  Justice  Williams,  in  the  case 
of  Forbes  v.  Marsh.  15  Conn.  384,  (decided  in  1843,)  in  which  the 
principal  authorities  are  reviewed.  The  decision  in  this  case  was 
followed  in  the  subsequent  case  of  Hart  v.  Carpenter,  24  Conn.  427, 
where  the  question  arose  upon  the  claim  of  a  bona  fide  purchaser. 

In  New  York  the  law  is  the  same,  at  least  so  far  as  relates  to  the 
vendee  in  a  conditional  sale  and  to  his  creditors;  though  there  has 
been  some  diversity  of  opinion  in  its  application  to  bona  fide  pur- 
chasers from  such  vendee. 

1X22,  in  the  case  of  Haggerty  v.  Palmer,  6  Johns.  Ch. 
(N.  Y.)  437,  where  an  auctioneer  had  delivered  to  the  purchaser  goods 
ction,  it  being  one  of  the  conditions  of  sale  that  indorsed 
notes  should  be  given  in  payment,  which  the  purchaser  failed  to  give, 
Chancellor  Kent  held  that  it  was  a  conditional  sale  and  delivery,  and 
gave  no  title  which  the  vendee  could  transfer  to  an  assignee  for  the 
benefil  of  creditors;  and  he  said  thai  the  cases  under  the  English 
bankrupt  act  did  not  apply  here.  The  chancellor  remarked,  however, 
thai  "if  the  goods  had  been  fairly  sold  by  P.,  [the  conditional  vendee,] 
or  if  the  proceeds   had  hen  actually  appropriated  by  the  assignees 

before  notice    Of    this    rait    and  of    the   injunction,    the    remedy    would 

have  been  •:  inc."    *    *    * 


92  EFFECT   IN   PASSING   PKOFERTY — SPECIFIC    GOODS 

In  Herring-  v.  Hoppock,  15  N.  Y.  409,  the  same  doctrine  was  fol- 
lowed. In  that  case  there  was  an  agreement  in  writing  for  the  sale 
of  an  iron  safe,  which  was  delivered  to  the  vendee,  and  a  note  at  six 
months  given  therefor;  but  it  was  expressly  understood  that  no  title 
was  to  pass  until  the  note  was  paid;  and  if  not  paid,  Herring,  the 
vendor,  was  authorized  to  retake  the  safe,  and  collect  all  reasonable 
charges  for  its  use.  The  sheriff  levied  on  the  safe  as  the  property 
of  the  vendee,  with  notice  of  the  plaintiff's  claim.  The  court  of  ap- 
peals held  that  the  title  did  not  pass  out  of  Herring.     *     *     * 

In  the  cases  of  Smith  v.  Lynes,  5  N.  Y.  41,  and  Wait  v.  Green,  35 
Barb.  585,  Id.  36  N.  Y.  556,  it  was  held  that  a  bona  fide  purchaser, 
without  notice  from  a  vendee  who  is  in  possession  under  a  conditional 
sale,  will  be  protected  as  against  the  original  vendor.  These  cases 
were  reviewed,  and,  we  think,  substantially  overruled,  in  the  subse- 
quent case  of  Ballard  v.  Burgett,  40  N.  Y.  314,  in  which  separate 
elaborate  opinions  were  delivered  by  Judges  Grover  and  Lott.  This 
decision  was  concurred  in  by  Chief  Judge  Hunt,  and  Judges  Wood- 
ruff, Mason,  and  Daniels;  Judges  James  and  Murray  dissenting.  In 
that  case  Ballard  agreed  to  sell  to  one  France  a  yoke  of  oxen  for  a 
price  agreed  on,  but  the  contract  had  the  condition  "that  the  oxen 
were  to  remain  the  property  of  Ballard  until  they  should  be  paid  for." 
The  oxen  were  delivered  to  France,  and  he  subsequently  sold  them  to 
the  defendant  Burgett,  who  purchased  and  received  them  without 
notice  that  the  plaintiff  had  any  claim  to  them.  The  court  sustained 
Ballard's  claim;  and  subsequent  cases  in  New  York  are  in  harmony 
with  this  decision.  See  Cole  v.  Mann,  62  N.  Y.  1 ;  Bean  v.  Edge,  84 
N.  Y.  510.    *     *    * 

The  decisions  in  Maine,  New  Hampshire,  and  Vermont  are  under- 
stood to  be  substantially  to  the  same  effect  as  those  of  Massachusetts 
and  New  York;  though  by  recent  statutes  in  Maine  and  Vermont, 
as  also  in  Iowa,  where  the  same  ruling  prevailed,  it  is  declared  in 
effect  that  no  agreements  that  personal  property,  bargained  and  de- 
livered to  another,  shall  remain  the  property  of  the  vendor,  shall 
be  valid  against  third  persons  without  notice.  George  v.  Stubbs,  26 
Me.  243 ;  Sawyer  v.  Fisher,  32  Me.  28 ;  Brown  v.  Haynes,  52  Me. 
578;  Boynton  v.  Libby,  62  Me.  253;  Rogers  v.  Whitehouse,  71  Me. 
222 ;  Sargent  v.  Gile,  8  N.  H.  325 ;  McFarland  v.  Farmer,  42  N.  H. 
386;  King  v.  Bates,  57  N.  H.  446;  Hefflin  v.  Bell,  30  Vt.  134;  Arm- 
ington  v.  Houston,  38  Vt.  448,  91  Am.  Dec.  366;  Fales  v.  Roberts, 
38  Vt.  503 ;  Duncan  v.  Stone,  45  Vt.  123 ;  Moseley  v.  Shattuck,  43 
Iowa,  540;  Thorpe  v.  Fowler,  57  Iowa,  541,  11  N.  W.  3. 

The  same  view  of  the  law  has  been  taken  in  several  other  states. 
In  New  Jersey,  in  the  case  of  Cole  v.  Berry,  42  N.  J.  Law,  308,  36 
Am.  Rep.  511,  it  was  held  that  a  contract  for  the  sale  of  a  sewing- 
machine  to  be  delivered  and  paid  for  by  installments,  and  to  remain 
the  property  of  the  vendor  until  paid  for,  was  a  conditional  sale,  and 


RESERVATION   OF   RIGHT   OF   POSSESSION   OR   PROPERTY  93 

gave  the  vendee  no  title  until  the  condition  was  performed;    and  the 
cases  are  very  fully  discussed  and  distinguished. 

In  Pennsylvania  the  law  is  understood  to  be  somewhat  different. 
It  is  thus  summarized  by  Judge  Depue,  in  the  opinion  delivered  in 
Cole  v.  Berry,  42  N.  J.  Law,  314  (36  Am.  Rep.  511),  where  he  says: 
"In  Pennsylvania  a  distinction  is  taken  between  delivery  under  a 
bailment,  with  an  option  in  the  bailee  to  purchase  at  a  named  price, 
and  a  delivery  under  a  contract  of  sale  containing  a  reservation  of 
title  in  the  vendor  until  the  contract  price  be  paid ;  it  being  held  that 
in  the  former  instance  property  does  not  pass  as  in  favor  of  creditors 
and  purchasers  of  the  bailee,  but  that  in  the  latter  instance  delivery 
to  the  vendee  subjects  the  property  to  execution  at  the  suit  of  his 
creditors,  and  makes  it  transferable  to  bona  fide  purchasers.  Cham- 
berlain v.  Smith,  44  Pa.  431 ;  Rose  v.  Story,  1  Pa.  190  [44  Am.  Rep. 
121]  ;  Martin  v.  Mathiot,  14  Serg.  &  R.  214  [16  Am.  Dec.  491]  ; 
Haak  v.  Linderman,  64  Pa.  499  [3  Am.  Rep.  612]."  But,  as  the 
learned  judge  adds:  "This  distinction  is  discredited  by  the  great 
weight  of  authority,  which  puts  possession  under  a  conditional  con- 
tract of  sale  and  possession  under  a  bailment  on  the  same  footing, — 
liable  to  be  assailed  by  creditors  and  purchasers  for  actual  fraud,  but 
not  fraudulent  per  se." 

In  this  connection,  see  the  case  of  Copland  v.  Bosquet,  4  Wash. 
C.  C.  588,  Fed.  Cas.  No.  3,212,  where  Mr.  Justice  Washington  and 
Judge  Peters  (the  former  delivering  the  opinion  of  the  court)  sus- 
tained a  conditional  sale  and  delivery  against  a  purchaser  from  the 
vendee,  who  claimed  to  be  a  bona  fide  purchaser  without  notice. 

In  Ohio  the  validity  of  conditional  sales  accompanied  by  delivery 
of  possession  is  fully  sustained.     The  latest  reported  case  brought  to 
our  attention  is  that  of  Call  v.  Seymour,  40  Ohio  St.  670,  which  arose 
n  a  written  contract  contained  in  several  promissory  notes  given 
for  installments  of  the  purchase  money  of  a  machine,  and  resembling 
very  much  the  contract  in  the  case  now  under  consideration.     Fol- 
lowing the  note,  and  as  a  part  of  the  same  document,  is  this  condi- 
tion:    "The  express  conditions  of  the  sale  and  purchase  of  the  sep- 
arator and  horse-power  for  which  this  note  is  given,  is  such  that  the 
title,  ownership,  or  possession  does  not  pass  from  the  said  Seymour, 
Sabin  &  Co.  until  this  note,  with  interest,  is  paid  in  full.    The  said  Sey- 
mour, Sabin  &  Co.  have  full  power  to  declare  this  note  due.  and  take 
ession  of  said  separator  and  horse-power,  at  any  time  they  may 
mi  this  note  insecure,  even  before  the  maturity  of  the  note,  and  to 
sell  lid  machine  at  public  or  private  sale,  the  proceeds  to  be  ap- 

plied upon  the  unpaid  balance  of  the  purcha  e   price."     The   machine 
eized  under  an  attachment  issued  against  the  vendee,  and  the 
ion  was  broughl  by  the  vendor  againsl  the  constable  who  served 
attachment.    The  ca  e  was  fully  argued,  and  the  authorities  pro' 
and  con  duly  coi  ed  by  the  court,  which  sustained  the  condition 


94  EFFECT   IN   PASSING   PROPERTY — SPECIFIC   GOODS 

expressed  in  the  contract,  and  affirmed  the  judgment  for  the  plain- 
tiff.    See,  also,  Sanders  v.  Keber,  28  Ohio  St.  630. 

The  same  law  prevails  in  Indiana.  Shireman  v.  Jackson,  14  Ind. 
459;  Dunbar  v.  Rawles,  28  Ind.  225,  92  Am.  Dec.  311;  Bradshaw 
v.  Warner,  54  Ind.  58;  Hodson  v.  Warner,  60  Ind.  214;  McGirr  v. 
Sell,  60  Ind.  249.  The  same  in  Michigan.  Whitney  v.  McConnell,  29 
Mich.  12;  Smith  v.  Lozo,  42  Mich.  6,  3  N.  W.  227;  Marquette 
Manuf'g  Co.  v.  Jeffery,  49  Mich.  283,  13  N.  W.  592.  The  same  in 
Missouri.  Ridgeway  v.  Kennedy,  52  Mo.  24;  Wangler  v.  Franklin, 
70  Mo.  659;  Sumner  v.  Cottey,  71  Mo.  121.  The  same  in  Alabama. 
Fairbanks  v.  Eureka,  67  Ala.  109;  Sumner  v.  Woods,  67  Ala.  139,  42 
Am.  Rep.  104.  The  same  in  several  other  states.  For  a  very  elab- 
orate collection  of  cases  on  the  subject,  see  Mr.  Bennett's  note  to 
Benj.  Sales,  (4th  Ed.)  §  320,  pp.  329-336;  and  Mr.  Freeman's  note 
to  Kanaga  v.  Taylor,  70  Am.  Dec.  62 ;  Id.  7  Ohio  St.  134.  It  is  un- 
necessary to  quote  further  from  the  decisions.  The  quotations  al- 
ready made  show  the  grounds  and  reasons  of  the  rule. 

The  law  has  been  held  differently  in  Illinois,  and  very  nearly  in 
conformity  with  the  English  decisions  under  the  operation  of  the 
bankrupt  law.  The  doctrine  of  the  supreme  court  of  that  state 
is  that  if  a  person  agrees  to  sell  to  another  a  chattel  on  condition 
that  the  price  shall  be  paid  within  a  certain  time,  retaining  the  title 
in  himself  in  the  mean  time,  and  delivers  the  chattel  to  the  vendee 
so  as  to  clothe  him  with  the  apparent  ownership,  a  bona  fide  pur- 
chaser, or  an  execution  creditor  of  the  latter,  is  entitled  to  protection 
as  against  the  claim  of  the  original  vendor.  Brundage  v.  Camp,  21 
111.  330;  McCormick  v.  Hadden,  37  111.  370;  Murch  v.  Wright,  46 
111.  488,  95  Am.  Dec.  455 ;  Michigan  Cent.  R.  Co.  v.  Phillips,  60  111. 
190;  Lucas  v.  Campbell,  88  111.  447;  Van  Duzor  v.  Allen,  90  111.  499. 
Perhaps  the  statute  of  Illinois  on  the  subject  of  chattel  mortgages  has 
influenced  some  of  these  decisions.  This  statute  declares  that  "no 
mortgage,  trust  deed,  or  other  conveyance  of  personal  property  hav- 
ing the  effect  of  a  mortgage  or  lien  upon  such  property,  is  valid  as 
against  the  rights  and  interests  of  any  third  person,  unless  the  pos- 
session thereof  be  delivered  to  and  remain  with  the  grantee,  or  the  in- 
strument provide  that  the  possession  of  the  property  may  remain 
with  the  grantor,  and  the  instrument  be  acknowledged  and  recorded." 
It  has  been  supposed  that  this  statute  indicates  a  rule  of  public  policy 
condemning  secret  liens  and  reservations  of  title  on  the  part  of  ven- 
dors, and  making  void  all  agreements  for  such  liens  or  reservations 
unless  registered  in  the  manner  required  for  chattel  mortgages.  At 
all  events,  the  doctrine  above  referred  to  has  become  a  rule  of  property 
in  Illinois,  and  we  have  felt  bound  to  observe  it  as  such. 

In  the  case  of  Hervey  v.  Rhode  Island  Locomotive  Works,  93  U.  S. 

*  664,  23  L.  Ed.  1003,  where  a  Rhode  Island  company  leased  to  certain 

Illinois  railroad  contractors  a  locomotive  engine  and  tender  at  a  cer- 


RESERVATION    OF   RIGHT   OF   POSSESSION    OR   PROPERTY  95 

tain  rent,  payable  at  stated  times  during  the  ensuing  year,   with  an 
agreement  that,  if  the  rent  was  duly  paid,  the  engine  and  tender  should 
become  the  property  of  the  lessees,  and  possession  was  delivered  to 
them,  this  court,  being  satisfied  that  the  transaction  was  a  conditional 
sale,  and  that,  by  the  law  of  Illinois,  the  reservation  of  title  by  the 
lessors  was  void'  as  against  third  persons  unless  the  agreement  was 
recorded,  (which  it  was  not  in  proper  time,)  decided  that  a  levy  and 
sale  of  the  property  in  Illinois,  under  a  judgment  against  the  lessees, 
were  valid,  and  that  the  locomotive  works  could  not  reclaim  it.     Mr. 
Justice  Davis,  delivering  the  opinion  of  the  court,  said :     "It  was  de- 
cided by  this  court  in  Green  v.  Van  Buskirk,  5  Wall.  307,  18  L.  Ed. 
599,  and  7  Wall.  139,  19  L.  Ed.  109,  that  the  liability  of  property  to 
be  sold  under  legal  process  issuing  from  the  courts  of  the  state  where 
it  is  situated,  must  be  determined  by  the  law  there,  rather  than  that 
of  the  jurisdiction  where  the  owner  lives.     These  decisions  rest  on 
the  ground  that  every  state  has  the  right  to  regulate  the  transfer  of 
property  within  its  limits,  and  that   whoever  sends  property  to  it  im- 
pliedly  submits   to  the  regulations   concerning  its   transfer   in   force 
there,  although  a  different  rule  of  transfer  prevails  in  the  jurisdic- 
tion where  he  resides.     *    *    *    The  policy  of  the  law  in  Illinois  will 
not  permit  the  owner  of  personal  property  to  sell  it,  either  absolutely 
or  conditionally,  and  still  continue  in  possession  of  it.     Possession  is 
one  of  the  strongest  evidences  of  title  to  this  class  of  property,  and 
cannot  be  rightfully   separated  from  the  title,  except  in  the  manner 
pointed  out  by  the  statute.     The  courts  of  Illinois  say  that  to  suffer, 
without  notice  to  the  world  the  real  ownership  to  be  in  one  person,  and 
the  ostensible  ownership  in  another,  gives  a  false  credit  to  the  latter, 
and  in  this  way  works  an  injury  to  third  persons.     Accordingly,  the 
actual   owner   of   personal    property   creating  an    interest  in   another 
co  whom  it  is  delivered,  if  desirous  of  preserving  a  lien  on  it,  must 
iply  with  the  provisions  of  the  chattel  mortgage  act.     Rev.  St.  111. 
1874.    711,    712."      The    Illinois   cases   are   then    referred    to    by    the 
learned  justice  to  show  the  precise  condition  of  the  law  of  that  state 
on  the  subject  under  consideration. 

Thi  of  Ilervey  v.  Rhode  [sland  Locomotive  Works  is  relied  on 

by  the  appellants  in  the  presenl   case   a,  a  decision   in   their   favor; 

hut  thi  Ot  a  correct  conclusion,  for  it   is  apparent  that  the  only 

poii  1  in  that  case  were — First,  that  it  was  to  he  governed 

by  the  law  of   Illinois,  the  place  where  the  property  was        lated; 

,ndly,   that  b  law  of    tllinois  the  agreemenl    for  continuing 

the  title  of  the  ;  ,  v  in  the  vendors  after  il-  deliver)    to   the   ven- 

vhereby  the  latter  became  th<  risible  owners,  was  void  as 

insl  third  pei  '  all  that  was  decided,  and  it  does  \u>\  aid 

the  ap  .  unless  they  can   3how  that  the  law  as  held  in  tllinois, 

contrary  to  the  great  weight  "f  authority  in  England  and  this  country, 

that  which  should  govern  the  |  And  this  we  think  they 


1)6  EFFECT  IN   PASSING    PROPERTY — SPECIFIC   GOODS 

cannot  do.  We  do  not  mean  to  say  that  the  Illinois  doctrine  is  not 
supported  by  some  decisions  in  other  states.  There  are  such  deci- 
sions; but  they  are  few  in  number  compared  with  those  in  which 
it  is  held  that  conditional  sales  are  valid  and  lawful  as  well  against 
third  persons  as  against  the  p   "ties  to  the  contract. 

The  appellants,  however,  rely  with  much  confidence  on  the  decision 
of  this  court  in  Heryford  v.  Davis,  102  U.  S.  235,  26  L.  Ed.  160,  a 
case  coming  from  Missouri,  where  the  law  allows  and  sustains  con- 
ditional sales.    But  we  do  not  think  that  this  case,  any  more  than  that 
L.t  Hervey  v.  Rhode  Island  Locomotive  Works,  will  be  found  to  sup- 
port their  views.    The  whole  question  in  Heryford  v.  Davis  was  as  to 
the  construction  of  the  contract.    This  was  in  the  form  of  a  lease,  but 
it  contained  provisions   so   irreconcilable  with  the  idea  of   its  being 
really  a  lease,  and  so  demonstrable  that  it  was  an  absolute  sale  with  a 
reservation  of  a  mortgage  lien,  that  the  latter  interpretation  was  given 
to  it  by  the  court.     This  interpretation  rendered  it  obnoxious  to  the 
statute  of  Missouri  requiring  mortgages  of  personal  property  to  be 
recorded  in  order  to  be  valid  as  against  third  persons.     It  was  con- 
ceded by  the  court,  in  the  opinion  delivered  by  Mr.  Justice  Strong, 
that  if  the  agreement  had  really  amounted  to  a  lease,  with  an  agree- 
ment for  a  conditional  sale,  the  claim  of  the  vendors  would  have  been 
valid.     The  first  two  or  three  sentences  of  the  opinion  furnish  a  key 
to  the  whole  effect  of  the  decision.     Mr.  Justice  Strong  says :    "The 
correct  determination  of  this  case  depends  altogether  upon  the  con- 
struction that  must  be  given  to  the  contract  between  the  Jackson  & 
Sharp  Company  and  the  railroad  company,  against  which  the  defend- 
ants below  recovered   their  judgment  and  obtained  their   execution. 
If  that  contract  was  a  mere  lease  of  the  cars  to  the  railroad  company, 
or  if  it  was  only  a  conditional  sale,  which  did  not  pass  the  owner- 
ship until  the  condition  should  be  performed,  the  property  was  not 
subject  to  levy  and  sale  under  execution  at  the  suit  of  the  defend- 
ant against  the  company.     But  if,  on  the  other  hand,  the  title  passed 
by  the  contract,   and  what   was   reserved  by  the  Jackson   &    Sharp 
Company  was  a  lien  or  security  for  the  payment  of  the  price,  or  what 
is  called  sometimes  a  mortgage  back  to  the  vendors,  the  cars  were 
subject  to  levy  and  sale  as  the  property  of  the  railroad  company." 
The  whole  residue  of  the  opinion  is  occupied  with  the  discussion  of 
the  true  construction  of  the  contract ;  and,  as  we  have  stated,  the  con- 
clusion was  reached  that  it  was  not  really  a  lease  nor  a  conditional 
sale,  but  an  absolute  sale,  with  the  reservation  of  a  lien  or  security 
for  the  payment  of  the  price.     This  ended  the  case ;    for,  thus  inter- 
preted, the  instrument  inured  as  a  mortgage  in  favor  of  the  vendors, 
and  ought  to  have  been  recorded  in  order  to  protect  them  against 
third  persons. 

But  whatever  the  law  may  be  with  regard  to  a  bona  fide  purchaser 
from  the  vendee  in  a  conditional  sale,  there  is  a  circumstance  in  the 


RESERVATION   OF   RIGHT   OF   POSSESSION   OR   PROPERTY  97 

present  case  which  makes  it  clear  of  all  difficulty.  The  appellant  in 
the  present  case  was  not  a  bona  fide  purchaser  without  notice.  The 
court  below  find  that,  at  the  time  of  and  prior  to  the  sale,  he  knew 
the  purchase  price  of  the  property  had  not  been  paid,  and  that  Russell 
&  Co.  claimed  title  thereto  until  such  pa>.  ^ent  was  made.  Under 
such  circumstances,  it  is  almost  the  unanimous  opinion  of  all  the  courts 
that  he  cannot  hold  the  property  as  against  the  true  owners ;  but  as 
the  rulings  of  this  court  have  been,  as  we  think,  somewhat  misunder- 
stood, we  have  thought  it  proper  to  examine  the  subject  with  some 
care,  and  to  state  what  we  regard  as  the  general  rule  of  law  where  it 
is  not  affected  by  local  statutes  or  local  decisions  to  the  contrary. 

It  is  only  necessary  to  add  that  there  is  nothing  either  in  the  statute 
or  adjudged  law  of  Idaho  to  prevent,  in  this  case,  the  operation  of  the 
general  rule,  which  we  consider  to  be  established  by  overwhelming 
authority,  namely,  that,  in  the  absence  of  fraud,  an  agreement  for  a 
conditional  sale  is  good  and  valid  as  well  against  third  persons  as 
against  the  parties  to  the  transaction;  and  the  further  rule,  that  a 
bailee  of  personal  property  cannot  convey  the  title,  or  subject  it  to 
execution  for  his  own  debts,  until  the  condition  on  which  the  agree- 
ment to  sell  was  made,  has  been  performed. 

The  judgment  of  the  supreme  court  of  the  territory  of  Utah  is 
affirmed. 


SPOOXER  v.  CUMMINGS. 

reme  Judicial  Court  of  Massachusetts,  1890.    151  Mass.  313,  23  N.  E.  839.) 

Replevin  of  a  horse.  Answer,  general  denial.  Plaintiff  proved 
ownership  prior  to  May  26,  1888,  and  identified  the  horse  as  the  one 
described  as  "one  black  horse  called  'Jenks  horse,'  "  delivered  to  D. 
F.  Pope,  but  never  paid  for,  under  the  following  contract: 

"Hudson,  May  26,  1888. 

"Received  of  L.  R.  Spooner,  this  day,  one  gray  marc,  called  'Hor- 
ton  marc ;'  one  gray  horse,  called  'Jer,ks  horse ;'  one  black  horse, 
called  'Jenks  horse;'  one  white-nose  horse,  called  'Boston  horse;' 
for  which  I  promise  to  pay  said  I„.  R.  Spooner  or  order  five  hundred 
seventy-five  dollars,  one  month  from  date,  at  City  National  Bank, 
with  interest  at  7  per  cent.  Said  horses  and  marc  to  be  and  re- 
main the  entire  and  absolute  property  of  said  Spooner  until  paid  in 
full  by  me.     And  1  hereby  agree  ti  ■  said  horses  and  mare  in 

good  order  and  condition,  as  the  same  now  are.  And  should  said 
horses  and  mare  die  before  said  sum  is  fully  paid,  1  hereby  agree  to 
ins  due  thereon.  And  should  said  horses  or  mare  be  re- 
turned to  or  taken  back  by  said  Spooner,  I  agree  thai  all  payments 
made  thereon  may  be  retained  by  said  Spooner  for  the  use  of  said 
horses  and  mare,  Daniel  K.  Pope." 

Cum. i  .  i  -7 


OS  EFFECT    IN    PASSING    PROPERTY — SPECIFIC    GOODS 

Plaintiff  kept  a  livery  and  sale  stable  in  Worcester,  and  had  sold 
horses  to  Pope  largely  within  the  past  three  or  four  years.  Plaintiff 
asked  the  court  to  rule  that  under  the  answer  defendant  could  only 
show  that  the  contract  relied  on  was  not  made,  or  that  the  horse  had 
been  paid  for;  but  the  court  ruled  that  defendant  might  show,  also, 
that  plaintiff  gave  Pope  authority,  express  or  implied,  by  the  course 
of  dealing,  to  sell  the  horse  before  he  paid  for  it. 

Against  his  objection,  plaintiff  was  required  to  answer,  in  cross- 
examination,  the  following  question :  "What  was  the  course  of 
dealing  between  you  and  Pope  in  the  year  1888,  about  May  26th, 
and  extending  back  a  little  and  forward  a  little?"  and  the  following 
evidence  from  plaintiff  in  cross-examination,  was  admitted :  "I  sold 
Pope  fifty  horses,  perhaps,  in  the  year  1888.  I  supposed  that  Pope 
wouldn't  use  fifty  horses  in  his  livery  stable  unless  he  sold  some.  He 
usually  kept  from  twenty-five  to  thirty.  Naturally  he  would  want 
to  sell  some  that  he  had,  or  some  other  ones,  to  make  room.  I 
didn't  expect  he  would  sell  any  of  mine  until  he  paid  for  them.  I 
would  have  made  objections  to  his  selling  one  of  my  horses,  even  if 
he  sent  me  the  money  the  next  day." 

Pope  was  permitted  to  testify  that  "the  course  of  dealing  between 
plaintiff  and  me  was  I'd  buy  horses  and  give  these  contracts,  and  I'd 
send  him  money,  and  he'd  apply  it  where  he  saw  fit,  on  any  of  these 
contracts.  He  used  to  urge  me  to  sell,  that  he  had  a  barn  full. 
Sometimes  I'd  tell  him  I  wanted  a  horse  for  a  particular  person.  I 
told  him  this  time  I  wanted  a  horse  for  a  teamster." 

J.  A.  Trull  was  permitted  to  testify  that  about  the  middle  of  June, 
1888,  Spooner  told  him  to  tell  Pope  that  he  had  a  carload  coming, 
and  to  sell  as  many  as  he  could.  Defendant  bought  this  horse  of 
Pope,  June  2,  1888,  and  paid  cash  at  the  time. 

Knowlton,  J.  Under  the  answer  of  the  defendant,  any  evidence 
was  competent  which  tended  to  contradict  the  contention  of  the 
plaintiff  that  the  title  to  the  horse  and  the  right  of  possession  were 
in  him.  Verry  v.  Small,  16  Gray,  122;  Whitcher  v.  Shattuck,  3 
Allen,  319.  The  defendant  was  not  a  party  to  the  written  contract 
between  the  plaintiff  and  Pope,  but  claimed  outside  of  it,  and  in  sup- 
port of  his  own  title  he  might  show  by  parol  what  was  the  real  ar- 
rangement between  them,  even  if  it  differed  from  that  contained  in 
the  writing.  Kellogg  v.  Tompson,  142  Mass.  76,  6  N.  E.  860.  If 
the  plaintiff  expressly  or  impliedly  authorized  the  sale  by  Pope  to 
him,  he,  having  bought  in  good  faith  from  the  apparent  owner,  ac- 
quired a  good  title.  It  is  immaterial  whether  his  right  depends 
upon  an  actual  authority  to  make  the  sale,  or  upon  facts  which  estop 
the  plaintiff  from  denying  the  validity  of  the  sale.  Burbank  v.  Crook- 
er,  7  Gray,  159,  66  Am.  Dec.  470;  Haskins  v.  Warren,  115  Mass.  514, 
538 ;  Tracy  v.  Lincoln,  145  Mass.  357,  14  N.  E.  122 ;  Bank  v.  Buffin- 
ton,  97  Mass.  498;  Fowler  v.  Parsons,  143  Mass.  401,  9  N.  E.  799. 

The  testimony  as  to  the  course  of  dealing  between  the  plaintiff 


RESERVATION    OF   RIGHT   OF   POSSESSION   OR   PROPERTY  99 

and  Pope,  involving  a  long  series  of  transactions,  all  of  the  same 
kind,  and  conducted  generally  in  the  same  way,  was  competent,  as 
tending  to  show  an  expectation  and  understanding  on  the  part  of 
both  that  Pope  would  sell  the  horses  which  he  bought  of  the  plain- 
tiff as  he  had  opportunity,  and  that  he  was  impliedly  authorized  to 
sell  this  horse  to  the  defendant.  Hubbell  v.  Flint,  13  Gray,  277; 
Bank  v.  Goodsell,  107  Mass.  149;  Lynde  v.  McGregor,  13  Allen,  172; 
Bragg  v.  Railroad  Corp.,  9  Allen,  54.  The  testimony  of  Trull,  as 
to  the  message  sent  to  Pope  by  the  plaintiff  about  the  middle  of  June, 
was  of  a  conversation  so  soon  after  the  sale  of  June  2d  to  the  de- 
fendant that  the  judge  might  well  admit  it  in  his  discretion.  It  re- 
lated to  the  general  course  of  dealing,  of  which  the  sale  to  Pope  of 
the  horse  replevied  was  a  part. 

The  jury  were  rightly  permitted  to  find  that  the  plaintiff  impliedly 
authorized  the  sale  by  Pope  to  the  defendant,  and  that  he  was  es- 
topped to  deny  the  validity  of  the  title  which  the  defendant  acquired, 
relying  on  Pope's  possession  and  apparent  ownership.  Exceptions 
overruled. 


PEOPLE'S  FURNITURE  &  CARPET  CO.  v.  CROS- 
BY et  al. 

(Supreme  Court  of  Nebraska,  1S9S.     57  Neb.  2S2,  77  N.  W.  65S,  73  Am.   St. 

Rep.   504.) 

Irvine,  C.  The  People's  Furniture  &  Carpet  Company  sold  to 
Mrs.  Crosby  a  bedstead,  mattress,  and  pillows  for  $92.50.  The  sale 
was  evidenced  by  a  written  contract  under  the  guise  of  a  lease,  with 
an  option  in  the  lessee  to  purchase.  In  legal  effect,  the  contract  was 
plainly  one  of  conditional  sale,  the  vendor  reserving  title  as  security 
for  the  purchase  money.  Payments  were  made  from  time  to  time, 
not  always  according  to  the  terms  of  the  so-called  lease,  and  some 
after  the  time  when,  by  its  terms,  payment  should  have  been  com- 
plete.    In  this  way  there  was  paid  altogether  the  sum  of  $87,  leaving 

50  unpaid.  Mrs.  Crosby  thereafter  sold,  or  attempted  to  sell, 
the  bedstead  and  mattress,  to  Ellis  Coder,  and  gave  him  possession 
thereof.  The  People's  Company  later  sued  on  a  writ  of  replevin 
for  the  goods,  and  they  were  taken  from  the  possession  of  Coder. 
The  suit  was  broughl  in  the  court  of  a  justice  of  the  peace.  (  »n  ap- 
peal Coder  recovered  a  judgment,  and  the  plaintiff  brings  the  < 
on  error. 

A  decision  is  sought  on  several  points  relating  to  the  construc- 
tion and  legal  effect  of  the  contract,  bul  the  judgment  must  be  af- 
firmed on  a  consideration  of  only  a  pari  of  the  transactions.  The 
writ  of  replevin  was  sued  out  against  Mrs.  Crosby  alone,  the  original 
vendee.  No  demand  was  made  upon  her,  nor  was  there  ever  any 
serviee    of    proci         Upon    her.      An    agent    of   the    plaintiff   went    with 


100  EFFECT    IN    PASSING    PROPERTY SPECIFIC    GOODS 

the  officer,  while  he  held  the  writ,  to  the  house  of  Coder,  and  there 
demanded  the  property.  The  agent  informed  Coder  of  the  rights  of 
the  plaintiff,  of  which  he  seems  to  have  been  in  fact  ignorant,  al- 
though charged  with  notice  by  a  proper  filing  of  the  contract  for 
record.  As  soon  as  possible,  and  before  the  property  had  been  re- 
moved, Coder  made  a  tender  of  the  amount  which  the  agent  stated 
to  be  due.  It  is  true  that  this  amount  was  $5.50,  and  Coder  tendered 
$6,  demanding  the  change;  but  the  tender  was  not  refused  because 
not  of  a  legal  character,  but  because  the  costs  of  the  replevin  pro- 
ceedings were  not  included.  When  the  tender  is  refused  because 
not  deemed  sufficient  in  amount,  and  absolutely,  it  cannot  be  avoided 
merely  because  not  in  lawful  money  to  the  precise  amount.  Guth- 
man  v.  Kearn,  8  Neb.  502,  1  N.  W.  129;  Grazing  Co.  v.  Price,  22 
Neb.  96,  34  N.  W.  97.  The  officer  then  took  the  goods.  After- 
wards Coder  made  a  precise  legal  tender  to  the  plaintiff,  and  it  was 
refused.  Later  Coder's  name  was  inserted  in  the  writ  and  other 
papers,  and  he  appeared  and  defended. 

We  think  it  is  the  law — and  it  certainly  ought  to  be — that  where 
goods  have  been  sold,  reserving  title  as  security  for  the  purchase 
money,  a  large  portion  thereof  has  been  paid,  and  the  vendor  has 
accepted  payments,  as  in  this  case,  after  the  day  when  payment  should 
have  been  completed,  he  is  in  no  position  to  retake  the  goods  with- 
out notice  and  without  demand.  In  such  case  a  tender  on  demand 
of  the  amount  remaining  due  is  .sufficient  to  retain  in  the  vendee  the 
right  of  possession.  O'Rourke  v.  Hadcock,  114  N.  Y.  541,  22  N.  E. 
33;  Taylor  v.  Finley,  48  Vt.  78;  Machine  Co.  v.  Bothane,  70  Mich. 
443,  38  N.  W.  326. 

Besides  the  objection  to  the  tender  already  disposed  of,  it  is  said 
that  it  was  not  kept  good,  and  that  it  should  have  included  costs. 
The  whole  of  the  record  before  the  justice  of  the  peace  is  not  before 
us.  So  far  as  we  have  the  record  here,  the  tender  seems  to  have 
been  kept  good,  and  we  need  not,  therefore,  inquire  whether  it  was 
necessary  to  do  so.  On  the  other  point,  it  is  quite  clear  that  there 
was,  when  the  tender  was  made,  no  liability  for  costs.  The  cases 
cited  as  holding  that  no  demand  is  necessary  prior  to  bringing  suit 
are  cases  where  the  question  was  as  to  the  liability  for  costs  at  the 
close  of  the  action,  or  where  the  attempt  was  to  defeat  an  action  in 
replevin  for  want  of  demand.  In  such  cases  it  is  held  that  asserting 
a  right  in  one's  self  avoids  the  necessity  of  a  previous  demand.  In 
such  cases  the  demand  reaches  only  the  question  of  procedure.  It 
has  not  been  held,  nor  is  it  the  law,  that  when  a  demand  is  neces- 
sary, not  merely  to  lay  the  foundation  for  the  remedy,  but  to  com- 
plete a  right  of  possession  in  the  plaintiff,  the  defendant,  by  denying 
the  right  of  possession,  waives  such  requisite  thereto.  Under  the 
rule  above  stated  the  plaintiff  was  in  no  position  to  assert  a  right  of 
possession  until  a  demand  had  been  made,  and  there  had  been  af- 
forded  an  opportunity  to   make  the  remaining  payment.     The  suit 


EESERVATION    OF   RIGHT   OF  POSSESSION   OR   PROPERTY  101 

had  been  instituted  without  a  demand.  Coder  was  not  a  party,  and 
the  officer  was  then,  as  to  him,  a  trespasser.  He  was  not  required  to 
pay  costs  on  his  own  account.  Regarding  him  as  the  representative 
of  Mrs.  Crosby,  the  situation  is  the  same.  The  plaintiff  had  no  right 
of  action  against  her  until  demand — not  for  the  goods,  but  for  the 
money.  The  writ  had  been  sued  out  without  such  demand,  and 
when  tender  was  made  she  was  not  liable  for  the  costs  then  accrued. 

The  point  is  not  made,  but  it  undoubtedly  suggests  itself,  that  in- 
terest was  properly  demandable  from  the  time  payment  should  have 
been  made.  The  tender  was  made  of  the  amount  which  the  plaintiff's 
agent  stated  remained  unpaid,  and  defendant  had  a  right  to  rely  on 
such  statement. 

Error  is  assigned  on  the  admission  in  evidence  of  certain  docu- 
ments from  the  files  of  the  justice.  The  case  was  tried  to  the  court 
without  the  intervention  of  a  jury,  so  these  assignments  are  unavail- 
ing. Moreover,  the  evidence  objected  to  was  competent  and  ma- 
terial as  showing  that  when  tender  was  made  Coder  had  not  been 
sued.     Affirmed. 


2.  Risk  of  Loss 


TUFTS  v.  GRIFFIN. 

(Supreme  Court  of  North  Carolina,  1S90.    107  N.  C.  47,  12  S.  E.  68,  10  L.  R. 

A.  520,  22  Am.   St  Rep.  863.) 

Action  by  James  W.  Tufts  against  J.  S.  Griffin  on  a  note  given  by 
defendant  for  part  of  a  purchase  price  of  a  soda  fountain  purchased 
by  him  of  plaintiff.  By  the  contract  of  sale  the  title  to  the  property 
sold  was  not  to  pass  until  the  entire  price  was  paid.     The  property 

>troyed  before  the  note  matured.     Judgment  for  plaintiff, 
defendant  appeals. 

Shepherd,  J.  This  is  a  case  of  the  first  impression  in  this  state. 
We  have  here  an  absolute  promise  of  the  defendant  to  pay  the  plain- 
tiff a  certain  sum,  it  being  the  balance  of  the  purchase  money  due 
the  plaintiff  upon  the  sale  of  a  soda  apparatus  to  the  defendant.  Tin- 
sale  was  a  conditional  one,  (see  Clayton  v.  1 1  ester,  80  N.  C.  275; 
Fridk  v.  Hilliard,  95  N.  C.  117;  and  the  cases  cited,)  and,  under  the 
contract,  the  defendant  took  the  apparatus  into  his  possession,  and 
!  it  in  all  respects  as  his  own.     Without  any  n<  rice  on  the 

part  of  the  defendanl  and  before  any  defaull  in  the  payment  of  the 
purchase  money,  the  pi  was  d<  stroyed  by  fire.     The  question 

i  .     ho    hall  hear  the  loss? 

Tl  ndanl  ii  hould  fall  upon  the  plaintiff  becau 

the  transaction  amounted  to  nothing  more  than  an  executory  agi 


102  EFFECT    IN    PASSING    PROPERTY — SPECIFIC    GOODS 

ment  to  sell,  and  that,  inasmuch  as  the  plaintiff  cannot  now  perform 
i  he  contract,  the  defendant  should  not  be  compelled  to  pay.  It  is 
very  true  that  such  contracts  are  sometimes  called  "executory,"  (as 
in  the  case  of  Ellison  v.  Jones,  26  N.  C.  48,)  and  the  vendee  is  also 
termed  a  "bailee,"  (Perry  v.  Young,  105  N.  C.  466,  11  S.  E.  511,) 
but  it  must  be  observed  that  these  expressions  are  used  in  reference 
to  the  strict,  legal  title  to  the  property,  and  they  can  therefore  have 
no  influence  in  the  determination  of  the  present  question,  which  is 
purely  one  of  considerations  for  an  absolute  promise  to  pay. 

The  recent  decision  in  Burnley  v.  Tufts,  66  Miss.  49,  5  South.  627, 
14  Am.  St.  Rep.  540,  is  directly  in  point.  There,  it  seems  that  this 
same  plantiff  sold  a  soda  apparatus  under  a  contract  precisely  simi- 
lar to  this,  and  the  property  was  destroyed,  as  in  this  case,  after 
some  of  the  notes  had  been  paid,  and  before  the  maturity  of  the  oth- 
ers. The  court  decided  that  the  plaintiff  was  entitled  to  recover  the 
amount  due  upon  the  remaining  notes.  As  we  entirely  concur 
in  the  reasoning  upon  which  the  decision  is  based,  we  will  reproduce 
a  part  of  the  language  of  the  opinion.  The  court  says:  "Burnley 
unconditionally  and  absolutely  promised  to  pay  a  certain  sum  for  the 
property,  the  possession  of  which  he  received  from  Tufts.  The  fact 
that  the  property  has  been  destroyed  while  in  his  custody,  and  be- 
fore the  time  for  the  payment  of  the  note  last  due,  on  payment  of 
which  only  his  right  to  the  legal  title  of  the  property  would  have 
accrued,  does  not  relieve  him  of  payment  of  the  price  agreed  on.  He 
got  exactly  what  he  contracted  for, — viz.,  the  possession  of  the  prop- 
erty, and  the  right  to  acquire  an  absolute  title  by  payment  of  the 
agreed  price.  The  transaction  was  something  more  than  an  execu- 
tory conditional  sale.  The  seller  had  done  all  he  was  to  do  except 
to  receive  the  purchase  price.  The  purchaser  had  received  all  that 
he  was  to  receive  as  the  consideration  of  his  promises  to  pay.  The 
inquiry  is  not  whether,  if  he  had  foreseen  the  contingency  which  has 
occurred,  he  would  have  provided  against  it,  nor  whether  he  might 
have  made  a  more  prudent  contract ;  but  it  is  whether  by  the  contract 
he  has  made  his  promise  absolute  or  conditional.  The  contract  was 
a  lawful  one,  and,  as  we  have  said,  imposed  upon  the  buyer  an  ab- 
solute obligation  to  pay.  To  relieve  him  from  this  obligation,  the 
court  must  make  a  new  agreement  for  the  parties,  instead  of  en- 
forcing the  one  made,  which  it  cannot  do." 

As  is  said  in  the  foregoing  extract,  the  vendor  has  done  all  that 
he  was  required  to  do,  and  the  transaction  amounted  to  "a  condi- 
tional sale  to  be  defeated  upon  the  non-performance  of  the  condi- 
tions. *  *  *  The  vendee  had  an  interest  in  the  property  which 
he  could  convey,  and  which  was  attachable  by  his  creditors,  and 
which  could  be  ripened  into  an  absolute  title  by  the  performance  of 
the  conditions."  1  Whart.  Cont.  §  617.  The  vendee  had  the  actual, 
legal,  and  rightful  possession  with  a  right  of  property  upon  the  pay- 
ment of  the  money.    Vincent  v.  Cornell,  13  Pick.  296,  23  Am.  Dec. 


SALE    ON   APPROVAL   OR   TRIAL  103 

683.  The  vendor  could  not  have  interfered  with  this  possession 
"until  a  failure  to  perform  the  conditions."  Newhall  v.  Kingsbury, 
131  Mass.  445.  Having  acquired  these  rights,  under  the  contracts, 
and  the  property  having  been  subjected  to  the  risks  incident  to  the 
exercise  of  the  exclusive  right  of  possession,  it  would  seem  against 
natural  justice  to  say  that  there  was  no  consideration  for  the  promise, 
and  that  the  loss  should  fall  upon  the  plaintiff. 

The  case  of  Swallow  v.  Emery,  111  Mass.  356,  cited  by  the  defend- 
ant, may,  perhaps,  be  distinguished  from  ours,  because  it  was  agreed 
that,  upon  the  payment  of  the  price,  the  vendor  was  to  execute  a  bill 
of  sale  to  the  vendee.  However  this  may  be,  we  think  that  the. 
principles  enunciated  in  Burnley  v.  Tufts,  supra,  are  better  sus- 
tained, both  by  reason  and  authority,  and  we  therefore  affirm  the 
judgment  of  the  court  below.     No  error.5 


IV.  Sale  on  Approval  or  Trial  8 


HUNT  v.  WYMAN. 

(Supreme  Judicial  Court  of  Massachusetts,  1SG8.    100  Mass.  19S.) 

Contract  on  an  account  annexed  for  $250  as  the  price  of  a  horse. 
Writ  dated  September  5,  1867.  Answer,  a  general  denial.  At  the 
trial  in  the  superior  court,  before  Morton,  J.,  the  plaintiff  testified 
that  he  had  the  horse  for  sale,  and  on  the  evening  of  August  12,  1867, 
the  defendant  looked  at  it  and  inquired  the  price,  and  was  told  $250; 
that  the  defendant  said  nothing  further  about  price,  but  asked  the 
character  of  the  horse,  and  was  told  that  the  horse  was  six  years  old, 
sound,  kind,  and  afraid  of  nothing  but  goats;  that  the  defendant 
wished  to  take  the  horse  to  try  it,  and  at  this  the  plaintiff  hesitated, 
and  the  defendant  then  told  him  that  "if  he  would  let  him  take  the 
horse  and  try  it,  if  he  did  not  like  it  he  would  return  it,  in  as  good 
condition  as  he  got  it,  the  night  of  the  day  he  took  it,"  to  which  the 
plaintiff  assented;  and  that  the  next  day  the  defendant  sent  his  serv- 
ant and  took  the  horse  from  the  plaintiff  aboul  eleven  o'clock  in  the 
fun-noon. 

The  plaintiff  Further  testified  that  the  horse  was  taken  for  the  pur- 
e  of  trying  it;  that  a  short  time  .after  it  was  taken  a  message  was 
brought  to  him  that,  before  it   reached  the  defendant's  place,  it  es- 
caped from  the  servant,  ran  away  and  was  injured;  that  mi  receiving 
tli<-  me  In-  wenl  to  the  stable  where  the  horse  was,  and  found 

it  injured  rely  that  it  could  not  he  used  or  removed  prudently; 

ompare  Dunlap  \.  Grote,  'i  0.  &  K.  L53  (1845). 

i  or  dl  'ii    i"n  "f  principles,  see  Tiffany,  s.-iirs  (2d  Ed.)  S   15, 


104  EFFECT    IN    PASSING    PROPERTY — SPECIFIC    GOODS 

that,  on  account  of  the  injury,  the  defendant  had  no  opportunity  to 
try  the  horse;  that  he  did  not  expect  that  the  defendant  would  finally 
take  the  horse  until  after  he  had  tried  it;  that  the  defendant  had 
neither  returned  the  horse  nor  offered  to  return  it;  and  that  the 
plaintiff  had  nothing  to  do  with  the  horse  since  he  put  it  in  charge 
of  the  defendant's  servant.  There  was  no  evidence,  and  it  was  not 
contended  by  the  plaintiff,  that  the  horse  was  injured  by  fault  of  the 
defendant  or  his  servant. 

The  judge  ruled  that  the  plaintiff  could  not  maintain  his  action  on 
this  evidence,  and  directed  a  verdict  for  the  defendant  which  was  re- 
turned; and  the  plaintiff  alleged  exceptions. 

WELLS,  J.  Upon  the  facts  stated  in  this  case,  there  was  a  bail- 
ment and  not  a  sale  of  the  horse.  The  only  contract,  aside  from  the 
obligations  implied  by  law,  must  be  derived  from  the  statement  of 
the  defendant,  that,  if  the  plaintiff  "would  let  him  take  the  horse  and 
try  it,  if  he  did  not  like  it  he  would  return  it  in  as  good  condition 
as  he  got  it."  This  contract,  it  is  true,  is  silent  as  to  what  was  to 
take  place  if  he  should  like  it,  or  if  he  should  not  return  it.  It  may 
perhaps  be  fairly  inferred  that  the  intent  was  that  if  he  did  like  the 
horse  he  was  to  become  the  purchaser  at  the  price  named.  But,  even 
if  that  were  expressed,  the  sale  would  not  take  effect  until  the  de- 
fendant should  determine  the  question  of  his  liking.  An  option  to 
purchase  if  he  liked  is  essentially  different  from  an  option  to  return 
a  purchase  if  he  should  not  like.  In  one  case  the  title  will  not  pass 
until  the  option  is  determined;  in  the  other  the  property  passes  at 
once,  subject  to  the  right  to  rescind  and  return. 

A  mere  failure  to  return  the  horse  within  the  time  agreed  may  be 
a  breach  of  contract,  upon  which  the  plaintiff  is  entitled  to  an  ap- 
propriate remedy ;  but  has  no  such  legal  effect  as  to  convert  the  bail- 
ment into  a  sale.  It  might  be  evidence  of  a  determination,  by  the  de- 
fendant, of  his  option  to  purchase.  But  it  would  be  only  evidence. 
In  this  case,  the  accident  to  the  horse,  before  an  opportunity  was 
had  for  trial  in  order  to  determine  the  option,  deprives  it  of  all  force, 
even  as  evidence. 

This  action,  being  founded  solely  upon  an  alleged  sale  of  the  horse 
for  an  agreed  price,  cannot  be  maintained  upon  the  evidence  report- 
ed.    Exceptions  overruled. 


SALE   OR  EETUEN 


V.  Sale  or  Return  T 


105 


HOUSE  v.  BEAK. 

(Supreme  Court  of  Illinois,  1892.     141   111.  290,  30  N.  E.   1065,  33  Am.   St. 

Rep.  307.) 

Assumpsit  for  goods  sold,  brought  by  Amelia  Beak  and  Alfred 
Bucher,  late  partners  under  the  firm  name  of  Beak  &  Bucher,  suing 
for  the  use  of  Wight  Bros.,  a  copartnership,  against  Everett  House, 
S.  G.  Lea,  and  others,  composing  the  firm  of  Lea  &  Co.  There 
was  a  judgment  for  plaintiffs,  which  was  affirmed  by  the  Appellate 
Court,  and  defendants  appeal. 

MagrudER,  C  J.s  *  *  *  It  is  further  assigned  as  error  that 
the  court  refused  to  instruct  for  the  defendants  as  follows:  "The 
jury  are  instructed  that,  as  to  the  claim  of  plaintiffs  for  goods  claim- 
ed to  have  been  consigned  by  plaintiffs  to  defendants,  there  is  no 
sufficient  evidence  to  support  a  verdict,"  etc.  The  point  is  made 
that  a  portion  of  the  goods  was  consigned  to  the  defendants,  to  be 
paid  for  when  sold,  and  to  be  returned  if  not  sold;  and  that  an  ac- 
tion of  assumpsit  on  the  common  counts  cannot  be  maintained  to 
recover  for  the  goods  so  consigned,  because,  there  is  no  evidence  of 
their  sale  by  the  defendants,  or  of  a  demand  for  their  return  by  the 
plaintiffs. 

Under  the  proofs  in  this  case  the  goods  in  question  were  not  con- 
signed to  the  defendants  to  be  sold  by  the  latter  as  agents  of  the 
plaintiffs,  but  the  agreement  between  the  parties  was  what  is  known 
as  a  contract  "on  sale  or  return."  "A  contract  'on  sale  and  return' 
is  an  agreement  by  which  goods  are  delivered  by  a  wholesale  dealer 
to  a  retail  dealer,  to  be  paid  for  at  a  certain  rate  if  sold  again  by  the 
latter,  and,  if  not  sold,  to  be  returned."  Story,  Sales.  §  249.  If  the 
vendee  returns  the  goods,  the  contract  of  sale  is  at  an  end  ;  it  he  does 
.  the  sale  be<  absolute,  and  the  price  of  the  goods  may  be 

recovered  in  an  action  for  goods  sold  and  delivered.  If  no  time  is 
specified  within  which  the  return  is  to  be  made,  the  law  implies  thai 
they  arc  to  be  returned  within  a  reasonable  time.  What  is  a  reason- 
able time  will  depend  upon  the  circumstances  of  each  case.  Id.  In 
such  cases  the  property  in  the  goods  passes  to  the  purchaser,  sub- 
tion  in  him  to  return  them  within  a  fixed  or  reasonable 
time.    The  price  is  fixed  al  the  time  of  the  sale  and  delivery  of  the 

ids.    The  purchaser  deals  with  the  g Is  as  his  own,  disposes  of 

them  as  he  plea      ,  foi  cash  or  on  credit,  is  under  no  obligation  to 
give  any  account  of  his  disposition  of  them,  and  is  only  liable  to  pay 

7  For  01  cussion  of  principles,  see  Tiffany,  Salea  (2d  Ed.)  §  W. 

»X]  emenf  of  fact    I    rewritten  and  pari  of  the  opinion  Is  omitted. 


106  EFFECT    IN    PASSING    PROPERTY — SPECIFIC    GOODS 

for  them  at  a  price  fixed  beforehand,  without  any  reference  to  the 
price  at  which  he  sells  them.  Jameson  v.  Gregory,  4  Mete.  (Ky.) 
363;  In  re  Linforth,  4  Sawy.  370,  Fed.  Cas.  No.  8,369;  Ex  parte 
White,  In  re  Nevill,  L.  R.  6  Ch.  App.  397. 

In  Moss  v.  Sweet,  3  Eng.  Law  &  Eq.  311,  where  goods  were  de- 
livered to  the  defendant  to  sell  again,  upon  his  agreement  to  ac- 
count for  such  as  were  sold  at  the  invoice  price,  with  an  option  to 
return  the  residue  within  a  reasonable  time,  and  where  he  sold  a 
portion,  but  failed  to  return  the  rest,  it  was  held  that  his  failure  to 
return  rendered  him  liable  as  upon  an  absolute  sale  and  to  an  ac- 
tion for  goods  sold  and  delivered. 

The  bargain  called  "sale  or  return"  means  "a  sale  with  a  right 
on  the  part  of  the  buyer  to  return  the  goods  at  his  option,  within 
a  reasonable  time,  and  *  *  *  the  property  passes ;  and  an  ac- 
tion for  goods  sold  and  delivered  will  lie  if  the  goods  are  not  re- 
turned to  the  seller  within  a  reasonable  time."  2  Benj.  Sales,  (6th 
Amer.  Ed.)  §  913,  p.  794. 

Such  sales  may  be  regarded  as  subject  to  a  condition  subsequent, — 
that  is,  upon  condition  that,  if  the  goods  are  not  sold,  they  are  to  be 
returned.  Therefore  the  property  vests  presently  in  the  vendee, 
defeasible  on  the  performance  of  the  condition.  If  the  defendant 
disables  himself  from  performing  the  condition,  or  fails  to  perform 
it  within  a  reasonable  time,  his  liability  to  pay  the  price  fixed  becomes 
unconditional,  and  the  plaintiff  may  declare  as  upon  an  indebitatus 
assumpsit.    Ray  v.  Thompson,  12  Cush.  281,  59  Am.  Dec.  187. 

These  definitions  of  a  contract  "on  sale  or  return"  fit  the  facts  in 
the  case  at  bar.  The  prices  were  fixed  upon  the  goods  when  they 
were  ordered.  The  consigned  goods  were  to  be  paid  for  when  sold, 
at  the  prices  invoiced ;  and  such  as  were  not  sold  were  to  be  return- 
ed. As  no  time  for  the  return  was  fixed,  a  reasonable  time  was  im- 
plied. The  defendants  kept  the  goods  for  more  than  three  years 
without  offering  to  return  them,  and  accepted  itemized  accounts  of 
them  without  objection.  Demands  were  frequently  made  upon  them 
to  pay  for  the  consigned  goods,  and,  if  such  goods  were  unsold  at 
the  dates  of  such  demands,  offers  should  have  then  been  made  to  re- 
turn them.  Under  the  circumstances,  we  think  the  defendants  failed 
to  exercise  their  option  within  a  reasonable  time,  and  are  liable  as 
upon  an  absolute  sale.  There  was  therefore  no  error  in  refusing  the 
instruction. 

The  cases  of  Creel  v.  Kirkham,  47  111.  344,  and  Johnston  v.  Salis- 
bury, 61  111.  316,  have  no  application  here,  as  in  those  cases  there 
was  no  sale  of  the  personal  property  by  a  vendor  to  the  vendee  so 
as  to  vest  the  title  thereto  in  the  latter  at  the  time  of  delivery.  Nor 
do  we  think  that  the  case  of  Jones  v.  Wright,  71  111.  61,  conflicts  with 
the  doctrine  here  announced.  It  was  there  said  that  the  arrange- 
ment was,  in  legal  effect,  a  sale,  with  the  privilege  of  returning  the 
property  when  the  buyer  should  choose  to  make  such  return  or  on 


SALE    OR   RETURN  107 

the  demand  of  the  seller.  The  buyer  may  make  himself  liable  to 
pay  the  price  fixed  in  the  agreement  by  refusing  to  return  the  proper- 
ty upon  demand  made  for  it  by  the  seller ;  but,  if  the  seller  does  not 
want  the  property,  and  makes  no  demand  for  it,  it  is  none  the  less 
true  that  the  buyer  will  become  liable  to  pay  the  price  fixed,  upon 
failing  to  return  the  property  within  a  reasonable  time. 

In  the  present  case,  demands  made  for  the  price  of  the  consigned 
goods,  unanswered  by  either  the  payment  of  the  money  or  an  offer 
to  return  the  goods,  amounted  substantially  to  such  a  refusal  to 
surrender  on  demand  as  was  held  to  be  sufficient  in  the  Jones  Case. 
The  judgment  of  the  appellate  court  is  affirmed. 


108  EFFECT    IN    PASSING    PBOPERTY — GOODS   NOT    SPECIFIC 


EFFECT  OF  CONTRACT  IN  PASSING  THE  PROPERTY— 
SALE  OF  GOODS  NOT  SPECIFIC 

I.  In  General  x 


BROWNFIELD  v.  JOHNSON. 
(Supreme  Court  of  Pennsylvania,  1SS9.    12S  Pa.  254,  18  Atl.  543,  6  L.  R.  A.  48.) 

Clark,  J.  A  complete  understanding  of  the  rules  of  law  govern- 
ing this  case  involves  a  brief  statement  of  the  material  facts :  On 
the  2d  day  of  December,  1886,  Brownfield  &  Co.,  the  defendants,  gave 
an  order  to  Lawrence  Johnson  &  Co.,  to  purchase  for  them  in  Brazil 
300  bags  best  quality  of  new  Brazil  nuts,  of  the  first  receipts,  pay- 
ment to  be  made  in  cash  on  arrival,  or  by  60-day  note,  etc.,  at  the 
defendants'  option,  the  plaintiffs  to  cable  price  at  the  time  of  ship- 
ment. On  the  same  day  the  plaintiffs  replied,  stating  that  Brazil 
nuts  were  not  bought  by  the  bag,  but  by  hectolitres,  a  measure  which 
in  past  years  averaged  from  100  to  120  pounds ;  that  the  nuts  came 
in  bulk  in  the  steamer,  and  the  defendants  would  have  to  furnish  the 
bags  on  arrival  in  New  York;  and  as  "the  outturn  of  the  measure 
is  uncertain"  they  proposed  to  order  450  hectolitres,  etc.  To  this 
the  defendants  replied  by  telephone :  "Order  400  hectolitres,  and 
buy  only  the  very  best  nuts  obtainable."  The  plaintiffs  placed  the 
order  in  the  hands  of  their  correspondents,  La  Roque,  Da  Costa  & 
Co.,  Para,  Brazil,  who  undertook  the  purchase,  and  on  the  9th  of 
February  following  advised  the  plaintiffs  of  shipment  per  steamer 
Portuence,  upon  board  of  which  were  nearly  6,000  hectolitres  of  Bra- 
zil nuts  for  other  parties.  Of  this  shipment,  and  of  the  price,  notice 
was  on  the  same  day  given  to  the  defendants.  Upon  the  arrival  of 
the  Portuence  in  New  York,  Lawrence  Johnson  &  Co.,  handed  to 
the  defendants  a  delivery  order  for  400  hectolitres  of  Brazil  nuts 
in  bulk,  in  separate  hold,  on  board  the  Portuence,  with  copy  of  origi- 
nal invoice,  and  the  plaintiffs'  bill,  amounting  to  $3,441.18.  The 
invoice  was  for  312  hectolitres  at  15,150  reis  each,  and  88  hectolitres 
at  14,000  reis  each;  showing  that  the  nuts  had  been  originally  pur- 
chased in  two  separate  lots,  and  at  different  prices.  The  defendants,. 
with  the  delivery  order  in  their  possession,  proceeded  to  New  York, 
and  went  on  board  the  Portuence,  where  they  found  one  consignment 
of  nuts  in  the  name  of  Brownfield  &  Co.,  but  the  plaintiff's  storekeep- 
er informed  them  that  the  400  hectolitres  in  question  were  embraced 
in  a  consignment  of  582  hectolitres  of  Brazil  nuts,  in  separate  hold,. 

i  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  47,  48. 


IN   GENERAL  109 

in  the  name  of  the  plaintiffs.  The  defendants  thereupon  refused  to 
receive  any  portion  of  these  nuts  as  an  execution  of  their  order.  The 
plaintiffs  tendered  to  the  defendants  the  whole  582  hectolitres  or  400 
hectolitres  thereof,  at  their  option,  at  the  invoiced  prices;  which 
tender,  in  either  alternative,  the  defendants  declined  to  accept.  The 
plaintiffs  afterwards  tendered  400  hectolitres  at  the  average  price, 
which  the  defendants  also  declined.  Subsequently  the  plaintiffs 
separated  the  400  hectolitres  from  the  lot,  and  notified  the  defendants 
of  their  weight,  but  the  defendants  absolutely  declined  to  accept 
the  nuts  on  any  of  the  several  propositions  made  by  the  plaintiffs. 
The  582  hectolitres  were  made  up  of  two  lots, — one  of  312  hectolitre?, 
invoiced  at  15,150  reis ;  the  other  of  270  hectolitres,  invoiced  at  14.- 
000  reis ;  88  hectolitres  of  the  latter  were  invoiced  to  the  defendants, 
and  the  residue,  being  182  hectolitres,  to  Lawrence  Johnson  &  Co., 
for  account  of  La  Roque,  Da  Costa  &  Co.,  who,  it  is  said,  according 
to  the  method  of  dealing  in  Brazil,  in  order  to  get  88  hectolitres  to 
fill  the  order,  were  obliged  to  buy  a  larger  lot.  That  all  parties  act- 
ed in  good  faith  is  a  fact  found  by  the  jury,  and  the  case  turns  upon 
the  question  whether  the  defendants'  order  was  properly  and  legally 
executed. 

If  the  purchase  had  been  of  400  hectolitres  only,  shipped  in  sepa- 
rate hold,  there  could  be  no  question  as  to  the  defendants'  liability 
for  the  price.  What,  then,  was  the  effect  of  placing  the  182  hecto- 
litres in  the  same  hold  with  the  400  consigned  to  the  defendants? 
It  may  be  conceded  as  a  general  rule  that,  as  between  vendor  and 
vendee,  when  it  is  sought  to  compel  a  party  to  pay  for  goods  which 
he  has  refused  to  accept,  there  can  be  no  recovery  unless  the  order 
has  been  strictly  and  literally  fulfilled.  The  buyer  is  entitled  to  re- 
fuse the  whole  of  the  goods  tendered  if  they  exceed  the  quantity 

■ed,  and  the  vendor  has  no  right  to  insist  upon  the  buyer's  ac- 
•ance  of  all,  or  upon  the  buyer's  selecting  out  of  a  larger  quan- 
tity delivered.  Benj.  Sales,  §  1030.  To  the  same  effect  are  the  cases 
cited  by  the  plaintiff  in  error.  With  reference  to  quantity,  however, 
the  rule  is  less  rigid  where  goods  are  ordered  from  a  correspondent 
who  is  agent  for  buying  them,  (Ireland  v.  Livingston,  I,.  R.  2  Q.  B. 

36  Law  J.  O.  i;.  50;    L.  R.  5  II.  L.  395;)    for  tin-  relation  of 

lor  and  vendee  which  finally  results  is  preceded  by  the  relation 
of  principal  and  agent,  and  the  agenl  in  such  a  transaction  is  neces- 
sarily invested  with  some  dej  ree  of  discretion  in  making  the  pur- 
cha  ■  e,  also,  Johnston  v.  Kershaw,  1..  R.  2  Exch,  82,  36  Law  J. 

h.  44,  and  Jefferson  v.  Quer  -  I   lw  T.  (N.  >7.     It  must 

led,  however,  that  the  purchase  and  tender  of  582  hecto 
litres,  upon  an  order  for  400,  would  involve  a  wider  discretion  than 

•Id    he    allowable    under   thi  of   tins   case,   even   as   be- 

ll principal  and  agent.      In  this  case,  however,  the  plaintiff'-  cor- 

re  pondenl   purchased  for  and  invoiced  to  the  defendants  400  hec 
to!:  id  thai   quantity  was  tendered.     The  remaining   182 


110  EFFECT    IN    PASSING    PROPERTY — GOODS    NOT    SPECIFIC 

hectolitres  were  not  invoiced  to  the  defendants,  although  the  plain- 
tiffs  proposed  that  the  defendants  might  have  them  if  they  chose  to 
take  them.  The  400  hectolitres  of  nuts  unquestionably  became  the 
property  of  the  defendants  when  purchased  in  Brazil,  for  they  were 
purchased  upon  their  order.  By  force  of  that  order  the  plaintiffs  be- 
came the  defendants'  agent,  with  authority  to  constitute  an  agent 
in  Para  for  its  execution;  and  the  nuts  were  bought  in  virtue  of  the 
authority  thus  conferred. 

The  only  question,  therefore,  would  seem  to  be  upon  the  effect 
of  the  shipping  of  the  whole  lot  of  582  hectolitres  in  one  hold,  al- 
though upon  separate  invoices,  and  to  different  consignees.  It  was 
shown  that  this  was  the  usual  method  of  shipping,  especially  when 
the  orders  were  small.  There  was  no  effort  to  establish  a  custom 
of  this  kind,  but  simply  to  show  that  this  was  the  usual  and  ordinary 
method  pursued  in  the  shipping  trade.  The  defendants  had  a  right 
to  suppose  these  goods  would  be  shipped  in  the  usual  manner,  unless 
they  directed  otherwise,  and  that,  although  intermingled  with  others 
in  the  forward  hold  of  the  vessel  for  transportation,  they  would  be 
separated  at  the  place  of  delivery.  The  nuts  in  question  were  of  the 
same  quality ;  they  were  bought  at  different  prices,  but  the  evidence 
is  clear  that  they  were  of  uniform  quality.  The  weight  of  American 
authority  supports  the  proposition  that,  when  property  is  sold  to  be 
taken  out  of  a  specific  mass  of  uniform  quality,  title  will  pass  at  once 
upon  the  making  of  the  contract,  if  such  appears  to  be  the  intent. 
Oil  in  a  tank  and  grain  in  an  elevator  may  serve  as  illustrations  of 
this  rule.  Where,  however,  the  property  sold  is  part  of  a  mass  made 
up  of  units  of  unequal  quality  or  value,  such  as  cattle  in  a  herd,  selec- 
tion is  'essential  to  the  execution  of  the  contract,  and  of  course  the 
rule  cannot  apply.  Benj.  Sales,  477-531,  and  cases  there  cited.  The 
storage  of  oil  in  tanks  and  of  grains  in  elevators,  although  not  uni- 
versal, is  the  usual  and  ordinary  means  employed  by  large  dealers 
in  those  commodities ;  and,  while  no  custom  of  that  kind,  technically 
speaking,  could  be  established,  the  usage  of  the  trade  and  general 
course  of  business  in  this  country  is  well  known.  In  view  of  the 
necessities  which  grow  of  out  such  usage  the  American  courts  have 
departed  from  the  rule  adhered  to  in  England,  and  have  recognized 
a  rule  for  the  delivery  of  this  class  of  property  more  in  conformity 
with  the  commercial  usages  of  the  country.  A  distinction  is  made 
between  those  cases  where  the  act  of  separation  is  burdensome  and 
expensive,  or  involves  selection,  and  those  where  the  article  is  uni- 
form in  bulk,  and  the  act  of  separation  throws  no  additional  burden 
on  the  buyer.  In  the  latter  class  of  cases  a  tender  of  too  much,  from 
which  the  buyer  is  to  take  the  proper  quantity,  is  a  good  delivery. 
Id.  1030,  note.  See,  also,  Kimberly  v.  Patchin,  19  N.  Y.  330,  75 
Am.  Dec.  334;  Hutchison  v.  Com.,  82  Pa.  472;  Wilkinson  v.  Stew- 
art, 85  Pa.  255;  Bretz  v.  Diehl,  117  Pa.  589,  11  Atl.  893,  2  Am. 
St.  Rep.  706. 


SUBSEQUENT   APPKOPRIATION  HI 

The  case  at  bar  bears  no  analogy  whatever  to  Stevenson  v.  Bur- 
gin;  49  Pa.  St.  44,  for  all  that  is  decided  by  that  case  is  that,  in  a 
contract  for  a  fixed  quantity  of  merchandise  to  be  delivered  on  board 
a  vessel,  the  purchaser  is  not  bound  to  accept  and  pay  for  a  larger 
quantity.  The  principle  has  no  application  to  the  evidence  in  this 
case.  The  case  at  bar  bears  a  closer  analogy  to  Lockhart  v.  Bon- 
sall,  77  Pa.  53.  In  that  case  a  tender  of  5,000  barrels  of  oil  was  made 
by  Lockhart  to  Bonsall  out  of  a  bulk  of  5,981  barrels,  contained 
in  118  bulk  cars.  As  it  was  the  duty  of  Bonsall  to  pump  the  oil  from 
the  cars  into  the  tanks  of  the  Anchor  works,  which  had  been  desig- 
nated as  the  place  of  delivery,  it  was  held  that  Lockhart  was  not 
bound  to  set  apart  the  precise  quantity  named  in  the  contract  before 
offering  to  deliver.  So,  here,  the  measuring  of  the  nuts,  and  their 
removal  from  the  vessel,  was  the  work  of  the  defendants,  and  as 
the  article  was  uniform  in  bulk,  selection  was  of  no  consequence, 
nor  was  the  act  in  any  sense  burdensome  or  expensive ;  for,  assum- 
ing that  the  whole  bulk  was  to  be  measured,  yet  the  expense  attach- 
ed to  the  whole,  and  each  part-owner  was  liable  to  share  it. 

We  are  of  opinion  that,  when  the  nuts  were  delivered  on  board  the 
Portuence  at  Para,  the  title  to  400-582  of  the  bulk  belonged  to  the 
defendants,  and  that  upon  the  arrival  of  the  vessel  at  New  York  the 
tender  of  the  582  hectolitres  from  which  the  defendants  were  invited 
to  take  their  share  was  a  good  delivery.    The  judgment  is  affirmed. 


II.  Subsequent  Appropriation  2 
1.  In  General 


COMMONWEALTH  v.  FLEMING. 

(Supreme  Court  of  Peniisyivimin.  1889.    130  Pa.  138,  18  Atl.  022,  5  L.  R.  A.  470, 

17  Am.  St  Rep.  763.) 

The  plaintiff  in  error,  Joseph  Fleming,  being  a  wholesale  liquor 

ler,  licensed  and  carrying  on  business  in  Allegheny  county,  sold 

and   sent  from  his  place  of  business,  C.  O.  D.,  to  Mercer  county, 

re  he  had  no  license,  liquors  ordered  by  persons  in  the  latter 

comity.     For  this  he  was.  at  the  court  of  quartei  "is  of  Mercer 

mty,  indicted,  tried,  convicted,  and   sentenced  for  selling  liquor 

therein  without  a  license.     Me  now  brings  error. 

(  ,  ,  J«     In  the  case  of  Garbrachl  v.  Com.,  96  Pa.  -119,  42  Am. 

Rep.  550.  which  was  an  indictmenl  for  selling  liquor  without  license, 

i  or  'ii  ■  m    '"ii  of  principles,  Bee  Tiffany,  Sales  (2d  Ed.)  H  19,  50. 
i'. i it  of  the  opinion  i  i  omitted 


112  EFFECT    IN    FASSINQ    PROFERTY — GOODS    NOT    SPECIFIC 

\vc  hold  that  "the  place  of  sale  is  the  point  at  which  goods  ordered 
or  purchased  are  set  apart  and  delivered  to  the  purchaser,  or  to  a 
common  carrier,  who,  for  the  purposes  of  delivery,  represents  him." 
In  that  case  the  order  for  the  liquor  was  solicited  and  obtained  by  the 
defendant  in  the  county  of  Mercer,  but  was  sent  to  his  principal, 
who  was  a  liquor  dealer  in  the  county  of  Erie.  The  order  was  ex- 
ecuted by  the  principal,  who,  in  the  county  of  Erie,  at  his  place  of 
business,  separated  or  set  apart  from  his  general  stock  the  liquor 
ordered,  and  delivered  it  to  a  common  carrier  to  be  forwarded  to  its 
destination  in  Mercer  county.  We  decided  that  this  was  no  viola- 
tion of  the  law  prohibiting  sales  without  license,  although  neither  the 
defendant,  who  was  a  traveling  agent,  nor  his  principal  held  any 
license  for  the  sale  of  liquor  in  Mercer  county.  This  decision  was 
not  changed  in  the  least  upon  a  subsequent  trial  of  the  same  de- 
fendant on  a  different  state  of  facts,  as  reported  in  1  Penny.  471. 
In  the  case  now  under  consideration  the  liquor  was  sold  upon  or- 
ders sent  by  mail  by  the  purchasers,  living  in  Mercer  county,  to  the 
defendant,  who  is  a  wholesale  liquor  dealer  in  Allegheny  county. 
The  goods  were  set  apart  at  the  defendant's  place  of  business  in 
Allegheny  county,  and  were  there  delivered  to  a  common  carrier, 
consigned  to  the  purchaser  at  his  address  in  Mercer  county,  and 
by  the  carrier  transported  to  Mercer  county,  and  there  delivered 
to  the  purchaser,  who  paid  the  expense  of  transportation.  Upon 
these  facts  alone,  the  decision  of  this  court  in  the  Case  of  Garbracht, 
supra,  is  directly  and  distinctly  applicable,  and  requires  us  to  reverse 
the  judgment  of  the  court  below,  unless  there  are  other  facts  in 
the  case  which  distinguish  it  from  that  of  Garbracht. 

It  is  claimed,  and  it  was  so  held  by  the  court  below,  that,  because 
the  goods  were  marked  "C.  O.  D.,"  the  sale  was  not  complete  un- 
til the  delivery  was  made ;  and  as  that  took  place  in  Mercer  county, 
where  the  defendant's  license  was  inoperative,  he  was  without  license 
as  to  such  sales,  and  became  subject  to  the  penalty  of  the  criminal 
law.  The  argument  by  which  this  conclusion  was  reached  was  simply 
that  the  payment  of  the  price  was  a  condition  precedent  to  the  de- 
livery, and  hence  there  was  no  delivery  until  payment,  and  no  title 
passed  until  delivery.  The  legal  and  criminal  inference  was,  the 
sale  was  made  in  Mercer,  and  not  in  Allegheny.  This  reasoning 
ignores  certain  facts  which  require  consideration.  The  orders  were 
sent  by  the  purchasers,  in  Mercer,  by  mail  to  the  seller,  in  Allegheny, 
and  in  the  orders  the  purchasers  requested  the  defendant  to  send  the 
goods  C.  O.  D.  The  well-known  meaning  of  such  an  order  is  that 
the  price  of  the  goods  is  to  be  collected  by  the  carrier  at  the  time  of 
the  delivery.  The  purchaser,  for  his  own  convenience,  requests  the 
seller  to  send  him  the  goods,  with  authority  in  the  carrier  to  receive 
the  money  for  them.  This  method  of  payment  is  the  choice  of  the 
purchaser,  under  such  an  order;    and  it  is  bevond  question  that,  so 


SUBSEQUENT   APPROPRIATION 


113 


far  as  the  purchaser  is  concerned,  the  carrier  is  his  agent  for  the 
receipt  and  transmission  of  the  money.  If  the  seller  accedes  to  such 
a  request  by  the  purchaser,  he  certainly  authorizes  the  purchaser  to 
pav  the  money  to  the  carrier,  and  the  purchaser  is  relieved  of  all 
liabilities  to  the  seller  for  the  price  of  the  goods  if  he  pays  the  price 
to  the  carrier.  The  liability  for  the  price  is  transferred  from  the 
seller  to  the  carrier;  and  whether  the  carrier  receives  the  price  or 
not,  at  the  time  of  delivery,  he  is  liable  to  the  seller  for  the  price  if 
he  does  deliver.  Substantially,  therefore,  if  the  delivery  is  made 
bv  the  carrier,  and  he  chooses  to  give  credit  to  the  purchaser  for  the 
pavment  of  the  price,  the  transaction  is  complete,  so  far  as  the  seller 
is  concerned,  and  the  purchaser  may  hold  the  goods.  Of  course,  if 
the  seller  were  himself  delivering  the  goods  in  parcels  upon  condi- 
tion that  on  delivery  of  the  last  parcel  the  price  of  the  whole  should 
be  paid,  it  would  be  a  fraud  on  the  seller  if  the  purchaser,  after  get- 
ting all  the  parcels,  should  refuse  to  perform  the  condition  upon 
which  he  obtained  them,  and  in  such  circumstances  the  seller  would 
be  entitled  to  receive  the  goods. 

This  was  the  case  in  Henderson  v.  Lauck,  21  Pa.  359.  The  court 
below,  in  that  case,  expressly  charged  that  if  the  seller  relied  on  the 
promise  of  the  purchaser  to  pay,  and  delivered  the  goods  absolutely, 
the  right  to  the  property  was  changed,  although  the  conditions  were 
never  performed ;  but  if  he  relied,  not  on  the  promise,  but  on  actual 
pavment  at  the  delivery  of  the  last  load,  he  might  reclaim  the  goods 
if  the  money  was  not  paid.  The  case  at  bar  is  entirely  different.  So 
far  as  the  seller  is  concerned,  he  is  satisfied  to  take  the  responsibility 
of  the  carrier  for  the  price,  in  place  of  that  of  the  seller.  He  au- 
thorizes the  purchaser  absolutely  to  pay  the  price  to  the  carrier; 
and,  if  lie  does  so,  undoubtedly  the  purchaser  is  relieved  of  all  re- 
sponsibility for  the  price,  whether  the  carrier  ever  pays  it  to  the  seller 
or  not.  But  the  carrier  is  also  authorized  to  deliver  the  goods.  If 
he  does  so,  and  receives  the  price,  he  is  of  course  liable  for  it  to  the 
r.  But  he  is  equally  liable  for  the  price  if  he  chooses  to  deliver 
the  goods  without  receiving  the  price.  It  cannot  be  questioned  thai 
the  purchaser  would  be  liable  also;  but,  as  he  had  received  the 
ods  from  one  who  was  authorized  to  deliver  them,  his  right  to 
hold  them  over  as  against  the  seller  .is  undoubted.  In  other  words, 
the  dir  i    embodied   in   the  letters  "C.   O.    I  >.,"  placed   upon  a 

package  committed  to  a  carrier,  is  an  order  to  the  carrier  to  collect 
the  mone;  For  the  pad  of  the  time  of  its  delivery.  It  is  a  part  of 
the  undertaking  of  the  carrier  with  the  consignor,  a  violation  of 
which  imposes  upon  the  carrier  the  obligation  to  pay  the  price  of  the 
arti'-1<-  delivered,  to  the  consignor.  We  have  been  referred  to  no 
authority,  and  have  been  unable  to  discover  any,  for  the  proposition 
that  in  such  a  case,  after  actual,  absolute  delivery  to  the  purchaser 
by  the  carrier  without  payment  of  the  price,  the  seller  could  reclaim 

Conn  t  Ca   I  ■  8  \ii:s — 8 


114  EFFECT    IN    PASSING    PROPERTY — GOODS    NOT    SPECIFIC 

the  goods  from  the  purchaser  as  upon  violation  of  a  condition  preced- 
ent. 

If,  now,  we  pause  to  consider  the  actual  contract  relation  between 
the  seller  and  purchaser,  where  the  purchaser  orders  the  goods  to 
be  sent  to  him  C.  O.  D.,  the  matter  becomes  still  more  clear.  Upon 
such  an  order,  if  it  is  accepted  by  the  seller,  it  becomes  the  duty  of 
the  seller  to  deliver  the  goods  to  the  carrier,  with  instruction  to  the 
carrier  to  collect  the  price  at  the  time  of  delivery  to  the  purchaser. 
In  such  a  case  it  is  the  duty  of  the  purchaser  to  receive  the  goods 
from  the  carrier,  and,  at  the  time  of  receiving  them,  to  pay  the  price 
to  the  carrier.  This  is  the  whole  of  the  contract,  so  far  as  the  seller 
and  the  purchaser  are  concerned.  It  is  at  once  apparent  that  when 
the  seller  has  delivered  the  goods  to  the  carrier,  with  the  instruction 
to  collect  the  price  on  delivery  to  the  purchaser,  he  has  performed  his 
whole  duty  under  the  contract;  he  has  nothing  more  to  do.  If  the 
purchaser  fail  to  perform  his  part  of  the  contract,  the  seller's  right 
of  action  is  complete ;  and  he  may  recover  the  price  of  the  goods 
from  the  purchaser,  where  the  purchaser  takes,  or  refuses  to  take, 
the  goods  from  the  carrier.  Hence  it  follows  that  the  passage  of  the 
title  to  the  purchaser  is  not  essential  to  the  legal  completeness  of  the 
contract  of  sale.  It  is,  in  fact,  no  more  than  the  ordinary  case  of  a 
contract  of  sale,  wherein  the  seller  tenders  delivery  at  the  time  and 
place  of  delivery  agreed  upon,  but  the  purchaser  refuses  perform- 
ance. In  such  case  it  is  perfectly  familiar  law  that  the  purchaser  is 
legally  liable  to  pay  the  price  of  the  goods,  although,  in  point  of  fact, 
he  has  never  had  them.  The  order  to  pay  on  delivery  is  merely  a 
superadded  term  of  the  contract ;  but  it  is  a  term  to  be  performed 
by  the  purchaser,  and  has  no  other  effect  upon  the  contract  than  any 
other  term  affecting  the  factum  of  delivery.  It  must  be  performed  by 
the  purchaser,  just  as  the  obligation  to  receive  the  goods  at  a  par- 
ticular time  or  a  particular  place.  Its  non-performance  is  a  breach 
by  the  purchaser,  and  not  by  the  seller,  and  therefore  cannot  affect 
the  right  of  the  seller  to  regard  the  contract  of  sale  as  complete, 
and  completely  performed  on  his  part,  without  any  regard  to  the 
question  whether  the  title  to  the  goods  has  passed  to  the  purchaser 
as  upon  an  actual  reception  of  the  goods  by  him.  If  this  be  so,  the 
case  of  the  commonwealth  falls  to  the  ground,  even  upon  the  most 
critical  consideration  of  the  contract  between  the  parties,  regard- 
ed as  a  contract  for  civil  purposes  only.  The  duties  which  lie  inter- 
mediate between  those  of  the  seller  and  those  of  the  purchaser  are 
those  only  which  pertain  to,  and  are  to  be  performed  by,  the  car- 
rier. These,  as  we  have  before  seen,  are  the  ordinary  duties  of  car- 
riage and  delivery,  with  the  additional  duty  of  receiving  the  price 
from  the  purchaser,  and  transmitting  it  to  the  seller. 

The  only  decided  case  to  which  we  have  been  referred  which 
presents  the  effect  of  an  order  C.  O.  D.  to  a  carrier  is  Higgins  v. 
Murray,  73  N.  Y.  252.    There  the  defendant  employed  the  plaintiff 


SUBSEQUENT   APPROPRIATION  115 

to  manufacture  for  him  a  set  of  circus  tents.  When  they  were  finish- 
ed, the  plaintiff  shipped  them  to  the  defendant  C.  O.  D.,  and  they 
were  destroyed  by  fire  on  the  route.  It  was  held  that  the  defendant, 
who  was  the  purchaser,  should  bear  the  loss ;  that  the  plaintiff  had 
a  lien  on  the  tents  for  the  value  of  his  labor  and  materials,  and  his 
retaining  his  lien  by  shipping  them  C.  O.  D.  was  not  inconsistent 
with,  and  did  not  affect,  his  right  to  enforce  the  defendant's  liability. 
In  the  course  of  the  opinion,  Chief  Justice  Church  said:  "Sup- 
pose, in  this  case,  that  the  defendant  had  refused  to  accept  a  delivery 
of  the  tent,  his  liability  would  have  been  the  same,  although  the  title 
was  not  in  him.  The  plaintiff  had  a  lien  upon  the  article  for  the 
value  of  his  labor  and  materials,  which  was  good  as  long  as  he  re- 
tained possession.  *  *  *  Retaining  the  lien  was  not  inconsistent 
with  his  right  to  enforce  the  liability  for  which  this  action  was 
brought.  That  liability  was  complete  when  the  request  to  ship  was 
made  by  the  defendant,  and  was  not  affected  by  complying  with  the 
request,  nor  by  retaining  the  lien  the  same  as  when  the  request  was 
made.  As  the  article  was  shipped  at  the  request  of,  and  for  the  bene- 
fit of,  the  defendant,  (assuming  that  it  was  done  in  accordance  with 
the  directions.)  it  follows  that  it  was  at  his  risk,  and  could  not  impair 
the  right  of  the  plaintiff  to  recover  for  the  amount  due  him  upon 
the  performance  of  his  contract.  *  *  *  As  before  slated,  the 
point  as  to  who  had  the  title  is  not  decisive.  It  may  be  admitted 
that  the  plaintiff  retained  the  title  as  security  for  the  debt,  and  yet  the 
defendant  was  liable  for  the  debt  in  a  proper  personal  action."  It 
seems  to  us  this  reasoning  is  perfectly  sound.  Practically,  it  was 
ruled  that  the  effect  of  the  order  C.  O.  D.  was  simply  the  retention 
of  the  seller's  lien,  and  that  such  retention  of  lien  is  not  incon 
sistent  with  a  right  of  recovery  for  the  price  of  the  article,  though, 
in  point  of  fact,  it  is  not  delivered  to  the  purchaser.  In  other  words, 
the  literal  state  of  the  title  is  not  decisive  of  the  question  of  liability 
of  the  purchaser,  and  he  may  be  compelled  to  pay  for  the  article, 
though  he  never  received  it  into  his  actual  possession.  The  chief 
justice  propounds  the  very  question  suggested,  heretofore,  of  a  re- 
fusal by  the  purchaser  to  accept  the  article,  and  holds  that  his  liability 
would  be  the  same,  though  the  title  was  not  in  him. 

In  Hutchinson  on  Carriers,  at  section  389,  the  writer  thus  states 
the  position  and  duty  of  the  carrier:  "The  carrier  who  accepts  the 
goods  with  such  instructions  [C.  O.  D."|  undertakes  thai  the}  shall 
nol  be  delivered  unless  the  condition  of  payment  be  complied  with, 
and  h''  the  agent  of  the  shipper  of  thi  to  receive  such 

payment.  He  therefore  undertalo  .  in  addition  t<>  his  duties  as 
carrier,  to  collect  for  the  consignor  the  price  of  his  goods."  \.nd 
again,  in  section  390:  "When  the  goods  are  so  received,  the  carrier 
is  held  to  a  stricl  compliance  with  such  instructions;  and,  it"  the 
are  delivered  without  an  exaction  from  the  consignee  of  the 
amount  which  the  carrier  is  instructed  to  collect,  he   becomes   liable 


11G  EFFECT    IN    FASSING    PROFERTY — GOODS    NOT    SPECIFIC 

to  the  consignor  for  it."  This  is  certainly  a  correct  statement  of  the 
position  and  liability  of  the  carrier.  He  becomes  subject  to  an  added 
duty, — that  of  collection ;  and,  if  he  fails  to  perform  it,  he  is  liable 
to  the  seller  for  the  price  of  the  goods.  We  have  searched  in  vain 
for  any  text-writer's  statement,  or  any  decision,  to  the  effect  that  in 
such  case  no  title  passes  to  the  purchaser.  We  feel  well  assured 
none  such  can  be  found.  But,  if  this  be  so,  the  whole  theory  that  the 
title  does  not  pass  if  the  money  is  not  paid  falls,  and  the  true  legal 
status  of  the  parties  results  that  the  seller  has  a  remedy  for  the  price 
of  the  goods  against  the  carrier.  In  other  words,  an  order  from  a 
seller  to  a  carrier  to  collect  on  delivery,  accepted  by  the  carrier, 
creates  a  contract  between  the  seller  and  the  carrier,  for  a  breach  of 
which  by  the  carrier  the  seller  may  recover  the  price  from  him.  So 
far  as  the  seller  and  purchaser  are  concerned,  the  latter  is  liable, 
whether  he  takes  the  goods  from  the  carrier  or  not,  and  the  order 
itself  is  a  mere  provision  for  the  retention  of  the  seller's  lien.  While, 
if  the  goods  are  not  delivered  to  the  purchaser  by  the  carrier,  the 
title  does  not  pass,  that  circumstance  does  not  affect  the  character  of 
the  transaction  as  a  sale ;  and  the  right  of  the  seller  to  recover  the 
price  from  the  purchaser,  if  he  refuse  to  take  them,  is  as  complete  as 
if  he  had  taken  them,  and  not  paid  for  them.     *     *     *     Reversed. 


ANDREWS  v.  CHENEY. 

(Supreme  Court  of  New  Hampshire,  1882.     62  N.  H.  404.) 

Assumpsit,  to  recover  money  paid  for  goods.  Facts  found  by  a 
referee.  October  28,  1879,  the  plaintiff  bought  goods  of  the  defend- 
ant and  paid  for  them.  The  defendant  did  not  have  in  stock  the  goods 
wanted,  and  the  plaintiff  selected  the  kind  and  quality  desired  from 
samples.  The  defendant  agreed  to  have  the  goods  at  his  store  within 
two  weeks,  at  which  time  the  plaintiff  was  to  call  for  them;  if  they 
were  ready  before  that  time  the  defendant  agreed  to  notify  him.  With- 
in the  stipulated  time  the  defendant  got  the  goods  into  his  store,  set 
them  apart  by  themselves,  and  marked  them  with  the  plaintiff's  name. 
The  goods,  together  with  the  store,  were  destroyed  by  fire  November 
21,  1879,  the  plaintiff  not  having  called  for  them.  The  court  ordered 
judgment  for  the  defendant,  and  the  plaintiff  excepted. 

Carpenter,  J.  The  property  in  the  goods  did  not  pass  to  the 
plaintiff  by  virtue  of  the  contract,  for  they  were  not  then  ascertained, 
and  may  not  have  been  in  existence.  The  agreement  on  the  part  of 
the  defendant  was  executory.  He  agreed  to  furnish  goods  correspond- 
ing to  the  samples  selected  by  the  plaintiff.  If  the  goods,  subsequently 
procured  and  set  apart  by  the  defendant,  did  not  conform  to  the 
samples,  the  plaintiff  had  a  right  to  reject  them.    It  does  not  appear 


SUBSEQUENT  APPKOPKIATION  H7 

that  he  waived  that  right.  The  defendant  was  not  concluded  by  his 
selection ;  he  might  have  sold  or  otherwise  disposed  of  the  particular 
articles  set  apart  by  him,  and  substituted  others  in  their  place.  A 
contract  of  sale  is  not  complete  until  the  specific  goods  upon  which  it 
is  to  operate  are  agreed  upon.  Until  that  is  done  the  contract  is  not 
a  sale,  but  an  agreement  to  sell  goods  of  a  particular  description.  It 
is  performed  on  the  part  of  the  vendor  by  furnishing  goods  which 
answer  the  description.  If,  as  in  the  case  of  a  sale  by  sample,  the 
specific  goods  are  not  ascertained  by  the  agreement,  the  property  does 
not  pass  until  an  appropriation  of  specific  goods  to  the  contract  is 
made  with  the  assent  of  both  parties.  Bog  Lead  Alining  Co.  v.  Mon- 
tague, 10  C.  B.  N.  S.  489;  Jenner  v.  Smith,  L.  R.  4  C.  P.  270;  Heil- 
butt  v.  Hickson,  L.  R.  7  C.  P.  438;  Merchants'  N.  Bank  v.  Bangs, 
102  Mass.  291;  Black,  Sales,  122,  127;  Benj.  Sales,  s.  358.  If  the 
plaintiff  authorized  the  defendant  to  make  the  selection,  the  property 
immediately  on  the  selection  vested  in  the  plaintiff.  Aldridge  v.  John- 
son, 7  E.  &  B.  885.  It  not  appearing  that  the  plaintiff  gave  such  au- 
thority, the  goods  at  the  time  of  the  fire  were  the  property  of  the  de- 
fendant, and  their  destruction  was  his  loss. 

By  the  terms  of  the  contract  the  defendant  was  to  have  the  goods 
at  his  store  within  two  weeks,  at  the  end  of  which  time,  or  sooner  if 
notified  that  they  were  ready,  the  plaintiff  was  to  call  for  them,  and 
the  defendant  was  to  deliver  them.  Within  the  stipulated  time  the 
defendant  procured  the  goods  and  had  them  ready  for  delivery.  This 
was  all  the  agreement  required  him  to  do,  and  all  that  he  could  do  until 
the  plaintiff  came  for  them.  The  plaintiff's  call  being  a  condition 
precedent  to  the  defendant's  obligation  to  deliver,  must  be  shown  in 
order  to  entitle  the  plaintiff  to  treat  the  contract  as  rescinded  and  re- 
cover back  the  purchase-money. 

It  may  be  that  the  trial  before  the  referee  proceeded  upon  the  mis- 
taken theory  that  the  rights  of  the  parties  were  concluded  by  the  de- 
struction by  fire  of  the  particular  goods  selected  by  the  defendant,  and 
that  the  only  question  was  upon  whom  the  loss  of  those  goods  should 
fall.  The  plaintiff  did  not  call  for  the  goods  before  the  fire;  but 
whether  he  did  after  the  fire  does  not  appear,  and  may  have  been  con- 
sidered immaterial.  The  rights  of  the  parties  under  the  agreement 
were  not  affected  by  the  destruction  of  the  goods.  If  they  were  set 
apart  without  authority  from  the  plaintiff,  he  still  had  the  right  to 
call  for  the  goods  he  bargained  for,  and  the  defendant  was  bound  to 
deliver  them,  ( Fpon  the  defendant's  m  gleel  or  refusal  to  deliver  them 
upon  reque  I  as  well  after  as  b  fore  the  fire,  the  plaintiff  mighl  at  his 
election  rescind  the  contract  and  recover  the  purchase-money,  or 
affirm  it  and  recover  for  the  breach.  Drew  v.  Claggett,  39  X.  M.  431; 
Weeks  v.  Robie,  42  X.  11.  316;   Swazey  v.  Company,  48  X.  II.  200. 

The  case  may  In-  recommitted  to  the  referee,  if  the  plaintiff  desii 
it,  for  the  purpo  e  of  showing  a  call  for  the  goods  after  the  fire.    If 


118  EFFECT    IN    PASSING    PROPERTY — GOODS    NOT    SPECIFIC 

recommitted,  it  will  be  open  to  the  defendant  to  show  that  he  was 
authorized  by  the  plaintiff  to  select  the  goods.  As  the  case  stands 
the  exceptions  are  overruled.     Exceptions  overruled. 


2.  Appropriation  by  Act  of  Seller 


SMITH  v.  EDWARDS. 
(Supreme  Judicial  Court  of  Massachusetts,  1892.    156  Mass.  221,  30  N.  E.  1017.) 

Action  by  Frank  W.  Smith  and  James  E.  Stoughton,  copartners  do- 
ing business  under  the  style  of  "Smith  &  Stoughton,"  of  Abington, 
Mass.,  against  John  Edwards  and  Frank  Edwards,  copartners  doing 
business  under  the  style  of  "Edwards  &  Son,"  of  Findlay,  Ohio.  From 
a  judgment  for  plaintiffs,  holding  certain  goods  and  chattels  of  the 
principal  defendants  in  the  possession  of  the  Old  Colony  Railroad 
Company,  as  trustees,  the  latter  excepts. 

Holmes,  J.  This  case  comes  before  us  on  the  exception  of  the 
Old  Colony  Railroad  Company  to  a  ruling  of  the  court  below  that  it 
should  be  charged  as  trustee  of  the  defendants.  The  defendants  have 
been  defaulted.  The  bill  of  exceptions  purports  to  state  the  evidence 
introduced  on  the  motion  to  charge  the  trustee,  but  does  not  disclose 
the,  findings  of  the  judge.  We  assume  them  to  have  been  the  most 
favorable  for  the  ruling  which  the  bill  of  exceptions  warrants.  The 
defendants  in  Ohio  ordered  of  the  plaintiffs,  who  are  manufacturers 
of  boots  and  shoes  in  Massachusetts,  through  the  plaintiffs'  traveling- 
salesman,  certain  calf  and  buff  shoes,  to  be  made  according  to  a  sample 
shown  to  the  defendants.  It  was  assumed  at  the  argument,  and  we 
assume,  that  the  contract  bound  the  defendants,  that  there  is  no  ques- 
tion under  the  statute  of  frauds,  and  that  the  shoes  were  made  accord- 
ing to  sample.  They  were  forwarded  over  the  Old  Colony  Railroad, 
we  must  assume,  if  it  be  material,  at  the  defendants'  expense,  and 
were  delivered  to  the  defendants.  This  mode  of  forwarding  un- 
doubtedly was  authorized  by  the  contract.  The  defendants  accepted 
the  buff  shoes,  but  refused  to  accept  the  calf  shoes,  and  shipped  the 
latter  back  to  the  plaintiffs  by  the  same  railroad.  The  plaintiffs  re- 
fused to  accept  them,  sued  the  defendants  for  the  price  of  the  shoes, 
and  trusteed  the  railroad  company.  The  calf  shoes  mentioned  are 
the  goods  for  which  the  railroad  company  was  charged. 

It  is  argued  for  the  trustees  that,  although  the  defendants  were 
guilty  of  a  breach  of  contract  in  refusing  to  accept  the  calf  shoes,  yet, 
as  the  shoes  were  not  in  existence  at  the  date  of  the  contract,  they 
did  not  become  the  defendants'  property  until  tendered  to  and  accepted 
by  the  defendants,  after  they  were  made. 


SUBSEQUENT   APPROPRIATION  HO 

Of  course,  the  title  to  the  shoes  could  not  be  vested  in  the  defend- 
ants without  their  consent.  But,  in  the  present  state  of  the  law,  it 
does  not  need  argument  to  show  that  a  contract  can  be  made  in  such 
a  way  as  subsequently  to  pass  the  title,  as  between  the  parties,  to 
goods'  unascertained  at  the  time  when  the  contract  is  made,  without  a 
subsequent  acceptance  by  the  buyer,  if  the  contract  commits  the  buyer 
in  advance  to  the  acceptance  of  goods  determined  by  other  marks. 
Blanchard  v.  Cooke,  144  Mass.  207,  227,  11  N.  E.  83;  Goddard  v. 
Binney,  115  Mass.  450.  15  Am.  Rep.  112;  Rodman  v.  Guilford,  112 
Mass.'405.  407;  Brewer  v.  Railroad  Co.,  104  Mass.  593,  595;  Nichols 
v.  Morse,  100  Mass.  523  ;  Middlesex  Co.  v.  Osgood,  4  Gray,  447,  449  ; 
Aldridge  v.  Johnson,  7  El.  &  Bl.  885,  899. 

In  the  case  of  goods  to  be  manufactured,  the  seller,  as  he  has  to 
tender  them  generally,  has  the  right  to  appropriate  goods  to  the  con- 
tract, so  far  that,  if  he  tenders  goods  conformable  to  it,  the  buyer's 
refusal  to  accept  them  is  a  breach.  The  buyer  cannot  say  that  he 
would  have  accepted  some  other  goods  had  they  been  tendered.  When 
goods  are  to  be  manufactured  and  forwarded  by  a  carrier  to  a  buyer 
at  a  distance,  the  seller's  delivery  of  such  goods  to  the  carrier,  as 
bailee  for  the  purchaser,  passes  the  title.  The  seller  cannot  forward 
them  until  they  are  specified.  The  delivery  is  an  overt  dealing  with 
the  goods  as  those  to  which  the  contract  applies,  and  puts  them  into 
a  possession  adverse  to  the  seller.  Although  not  strictly  a  delivery,  it 
is  an  act  having  the  legal  effect  of  a  true  delivery,  which,  in  common 
legal  language,  it  is  said  to  be.  Hallgarten  v.  Oldham,  135  Mass.  1. 
9,  46  Am.  Rep.  433;  Orcutt  v.  Nelson,  1  Gray,  536,  543;  Merchant 
v.  Chapman,  4  Allen.  362.  364;  Kline  v.  Baker,  99  Mass.  253,  254. 
The  act  is  required  of  the  seller  by  the  terms  of  the  contract,  and  thus 
is  assented  to  in  advance  by  the  buyer,  on  the  condition  that,  as  sup- 
posed, the  goods  answer  the  requirements  of  the  contract.  Therefore 
it  is  a  binding  appropriation  of  the  goods  to  the  contract,  and  passes 
the  title,  as  we  have  -aid.  Putnam  v.  Tillotson,  13  Mete.  (Mass.)  317, 
rchant  v.  Chapman,  -1  Allen.  362,  364;  <  )dell  v.  Railroad  Co., 
109  Mass.  50;  Wigton  v.  Bowley,  130  Mass.  252,  254;  Bragano  v. 
Long,  4  Barn.  &  C.  219;   Wait  v.  Baker,  2  Exch.  1,  7. 

The  present  case  could  be  disposed  of  upon  a  narrower  -round.  It 
would  be  enough  to  -a\  that,  so  far  as  we  can  see,  the  judge  who  h< 
,]],.  motion  to  charge  the  trustee  was  warranted  in  finding  as  a  tact 
that  the  defendants  authorized  the  plaintiffs  to  appropriate  the  shoes 
to  the  contract,  even  if  the  inference  was  nol  necessary  as  matter  o\ 
law.  The  question  always  is  what  intent  the  parties  have  expn 
cither  in  terms  or  by  rea  onable  implication.  Anderson  v.  Morice,  I.. 
k.  l    \pp.  Cas.  713;    Navigation  Co.  v.  De  Main-.  .^2  Law  J.  Q.  B. 

!2,  328,  33  Raw  f.  Q.  B.  21  I      Exc<  ptions  overruled. 


1-0  EFFECT    IN    PASSING    PROrERTY GOODS    NOT    SPECIFIC 

BRIGHAM  v.  HIBBARD. 
(Supreme  Court  of  Oregon,  1S96.     28  Or.  386,  43  Pac.  383.) 

Action  by  John  W.  Brigham  against  George  L.  Hibbard.  Judgment 
for  plaintiff.    Defendant  appeals. 

Bean,  C.  J.  This  is  an  action  brought  by  a  manufacturer  of 
boots  and  shoes  in  Boston,  Mass.,  to  recover  for  goods  sold  and  de- 
livered to  the  defendant.  The  defendant  admits  the  delivery  of  the 
goods,  but  denies  the  sale,  claiming  that  he  gave  an  order  for  certain 
goods,  to  be  manufactured  and  shipped  from  Boston,  to  one  Wetmore,. 
— an  agent  to  solicit  orders  for  plaintiff, — for  which  he  was  to  pay 
$503,  but  that  the  goods  sent  did  not  correspond  with  the  order ;  that 
he  examined  them  immediately  after  their  receipt,  and,  finding  that 
they  did  not  conform  to  the  order,  notified  Wetmore,  who  was  in 
Portland  at  the  time,  that  he  would  not  accept  the  goods,  and  that,  by 
an  agreement  between  him  and  Wetmore,  he  retained  the  possession 
of  them,  to  be  sold  on  plaintiff's  account.  Judgment  of  the  court  be- 
low was  in  favor  of  plaintiff,  and  defendant  appeals.  There  are  nu- 
merous assignments  of  error  in  the  record,  but,  for  convenience,  they 
may  be  grouped  under  two  principal  heads :  First,  error  of  the  court 
in  ruling — both  in  admitting  testimony  and  instructing  the  jury — that, 
if  the  goods  delivered  to  the  defendant  were  of  the  kind  and  quality 
ordered,  plaintiff  could  recover  without  proof  of  an  actual  acceptance 
by  the  defendant ;  second,  error  in  refusing  to  allow  defendant  to  de- 
tail the  entire  conversation  between  him  and  Wetmore  at  the  time,  or 
soo.n  after,  the  goods  were  examined. 

The  first  assignment  of  error  is  based  on  the  contention  that,  in  an 
action  for  goods  sold  and  delivered,  the  plaintiff  must  not  only  prove 
a  sale  and  delivery,  but  an  actual  acceptance  by  the  vendee.  We  do 
not  so  understand  the  law.  When  it  is  sought  to  give  validity  to  a 
contract  void  under  the  statute  of  frauds,  there  must  not  only  be  a 
delivery,  but  an  actual  receipt  and  acceptance  of  the  goods  by  the 
buyer.  Caulkins  v.  Hellman,  47  N.  Y.  449,  7  Am.  Rep.  461 ;  Remick 
v.  Sandford,  120  Mass.  309.  But,  where  the  contract  itself  is  valid, 
a  delivery,  pursuant  to  its  terms,  at  the  place  and  in  the  manner  agreed 
upon,  if  the  goods  conform  to  the  contract,  will  sustain  an  action  for 
goods  sold  and  delivered,  without  any  formal  acceptance  by  the  buyer. 
Schneider  v.  Railroad  Co.,  20  Or.  172,  25  Pac.  391 ;  Ozark  Lumber 
Co.  v.  Chicago  Lumber  Co.,  51  Mo.  App.  555;  Nichols  v.  Morse,  100 
Mass.  523;  Kelsea  v.  Manufacturing  Co.,  55  N.  J.  Law,  320,  26 
Atl.  907,  22  L.  R.  A.  415;  Diversy  v.  Kellogg,  44  111.  114,  92  Am. 
Dec.  154;  Krulder  v.  Ellison,  47  N.  Y.  36,  7  Am.  Rep.  402;  Pacific 
Iron  Works  v.  Long  Island  R.  Co.,  62  N.  Y.  272;  Benj,  Sales  (6th 
Ed.)  §§  699,  765;  Tied.  Sales,  §  112.  The  buyer  has  a  reasonable 
time  after  the  delivery  in  which  to  examine  the  goods,  and,  if  they  are 
not  of  a  kind  and  quality  ordered,  he  may  then  refuse  to  accept  them, 


SUBSEQUENT  APPROPRIATION  121 

and  thereby  rescind  the  contract;  but  this  right  does  not  prevent  the 
title  from  passing,  nor  a  recovery  by  the  seller  in  an  action  for  goods 
sold  and  delivered,  if  in  fact  they  do  conform  to  the  terms  of  the  con- 
tract.   Tied.  Sales,  §  112. 

The  next  assignment  of  error  is  not  well  taken,  because  it  does  not 
appear  that  Wetmore  had  authority  to  cancel  the  contract  between 
plaintiff  and  defendant,  or  substitute  a  new  one,  or  to  bind  the  plain- 
tiff by  any  agreement  in  reference  to  the  future  disposition  of  the 
goods.  He  was  a  traveling  agent  and  solicitor  of  orders  for  his  prin- 
cipal, but  such  authority  did  not  give  him  power  to  rescind  or  change 
the  contract  after  the  receipt  of  the  goods  by  defendant.  Diversy  v. 
Kellogg,  44  111.  114,  92  Am.  Dec.  154;  Stilwell  v.  Insurance  Co.,  72 
N.  Y.  385.  In  this  connection  the  defendant  was  permitted  to  give 
evidence  tending  to  show  that  the  goods  did  not  conform  to  the  sam- 
ples, and  were  not  of  the  kind  and  quality  ordered,  and  that  immediate- 
ly after  their  receipt  he  notified  Wetmore  of  that  fact,  and  refused 
to  accept  the  goods,  and  the  court  held,  and  so  instructed  the  jury,  that 
if  the  goods  were  not  of  the  kind  and  quality  ordered,  and  immediately 
after  the  discovery  of  that  fact  the  defendant  tendered  them  back  to 
Wetmore,  and  gave  him  notice  that  they  were  subject  to  plaintiff's 
order,  such  facts  would  be  a  sufficient  rescission  of  the  contract,  and 
prevent  a  recovery  in  this  action,  and  this  was  as  favorable  to  the  de- 
fendant as  he  could  reasonably  expect,  under  the  showing  as  to  Wet- 
more*s  authority  to  bind  the  plaintiff.  The  notice  to  Wetmore"  by  de- 
fendant that  he  declined  to  accept  the  goods  because  they  did  not  con- 
form to  the  order  was  perhaps  material,  as  part  of  the  res  gestae,  and 
as  an  act  on  his  part  explaining  and  qualifying  his  conduct  in  allow- 
ing the  goods  to  remain  in  his  store.  Caulkins  v.  Hellman,  47  N.  Y. 
449,  7  Am.  Rep.  461.  But  it  was  not  within  the  scope  of  Wetmore's 
agency  to  make  a  new  contract  for  the  plaintiff  in  reference  to  such 
goods. 

Finding  no  error  in  the  record,  the  judgment  of  the  court  below 

must  be  affirmed. 


NEW  ENGLAND  DRESSED  MEAT  &  WOOL  CO.  v.  STAND- 
ARD WORSTED  CO. 

(Supreme  Judicial  Court  of  Massachusetts,  is'."">.    165  Mass.  828,  48  X.  EL  112, 

52  Am.  St.  Rep.  .",k;.) 

Anion  by  the  New  England  Dressed  Meat  &  Wool  Company  against 
the  Standard  Worsted  Company.  Judgment  for  plaintiff,  and  defend- 
ant excepts. 

KnowlTON,  J.*  The  plaintiff  seeks  to  recover  only  upon  the  first 
and  third  counts  of  the  amended  declaration,  which  set  forth  a  claim 

*  Tart  of  tin-  opinion  is  omitted. 


122  EFFECT    IN    PASSING    PROPERTY — GOODS    NOT    SPECIFIC 

for  the  price  of  goods  sold.  As  the  case  was  submitted  to  the  jury,  a 
verdict  could  not  be  rendered  for  the  plaintiff  unless  it  was  proved 
that  the  title  passed  to  the  defendant.  The  contract  of  sale  covered 
certain  specific  property,  namely,  the  fine  combed  wool  which  the 
plaintiff  had  on  hand  when  the  contract  was  made,  and  also  such  fine 
combed  wool  as  the  plaintiff  should  manufacture  within  the  next  30 
days ;  the  whole  to  be  paid  for  at  40  cents  per  pound.  The  present 
action  concerns  only  a  part  of  the  wool  subsequently  manufactured, 
and  the  principal  question  in  the  case  is  whether  the  title  passed  be- 
fore the  action  was  brought. 

What  was  necessary  to  give  the  contract  effect  upon  the  wool  to  be 
produced  so  as  to  change  the  ownership  from  the  plaintiff  to  the  de- 
fendant? The  plaintiff  was  a  manufacturer  of  wool,  and  it  is  clear 
that  of  the  quantity  of  wool  of  different  kinds  in  its  possession  none 
would  pass  to  the  defendant  until  something  occurred  to  designate  it 
as  that  covered  by  the  contract.  The  parties  contemplated,  as  their 
contract  shows,  that  the  plaintiff,  who  was  to  manufacture  the  wool, 
should,  in  connection  with  the  work  of  manufacturing  it,  separate  it 
from  the  mass  of  wool  then  in  its  possession,  and  determine  its  weight, 
so  that  it  would  appear  to  be  the  property  called  for  by  the  contract ; 
and  its  price  would  be  ascertained.  A  learned  writer  states  the  law 
to  be  as  follows:  "In  a  sale  of  a  portion  of  a  larger  mass,  the  whole 
remaining  in  the  possession  of  the  vendor,  with  a  right  and  power  in 
him  to  make  a  separation,  both  upon  principle  and  the  weight  of  au- 
thority no  title  passes  until  that  is  done,  so  as  to  enable  the  vendor  to 
recover  the  price,  even  for  goods  'bargained  and  sold.'  "  Benj.  Sales 
(6th  Am.  Ed.)  308.  This  doctrine  is  well  established  in  Massachusetts, 
and,  while  the  decisions  are  not  uniform,  it  is  a  rule  which  prevails 
generally  in  this  country  as  well  as  in  England.  Scudder  v.  Worster, 
11  Cnsh.  573;  Weld  v.  Cutler,  2  Gray,  195;  Middlesex  Co.  v.  Osgood, 
4  Gray,  447;  Ropes  v.  Lane,  9  Allen,  502;  Keeler  v.  Goodwin,  111 
Mass.  490;  Morse  v.  Sherman,  106  Mass.  430-432;  Nichols  v.  Morse, 
100  Mass.  523;  Turner  v.  Langdon,  112  Mass.  265;  The  Elgee  Cot- 
ton Cases,  22  Wall.  180-187,  22  L.  Ed.  863;  Hatch  v.  Oil  Co., 
100  U.  S.  124-134,  25  L.  Ed.  554;  Morrison  v.  Dingley,  63  Me. 
553;  Bailey  v.  Smith,  43  N.  H.  141;  Haldeman  v.  Duncan,  51  Pa. 
66;  Hahn  v.  Fredericks,  30  Mich.  223,  18  Am.  Rep.  119;  Woods  v. 
McGee,  7  Ohio,  127,  pt.  2,  30  Am.  Dec.  220;  Browning  v.  Hamilton, 
42  Ala.  484;  Bank  v.  Gillette,  90  Ind.  268,  46  Am.  Rep.  222;  Fergu- 
son v.  Bank,  14  Bush  (Ky.)  555;  Baldwin  v.  McKay,  41  Miss.  358; 
Upham  v.  Dodd,  24  Ark.  545;  Courtright  v.  Leonard,  11  Iowa,  32; 
McLaughlin  v.  Piatti,  27  Cal.  452-463. 

We  think  that  this  rule  is  applicable  to  the  present  case.  The  reg- 
ular process  of  manufacture  which  was  necessary  to  bring  the  prop- 
erty within  the  contract  would  leave  it  a  part  of  the  larger  mass  in 
the  possession  of  the  plaintiff.  According  to  the  uncontradicted  tes- 
timony, as  the  wool  was  manufactured  it  was  conducted  into  bins  by 


SUBSEQUENT   APPROPRIATION  1-3 

a  spout,  and  in  the  absence  of  some  special  action,  taken  for  the  pur- 
pose, there  would  be  nothing  to  distinguish  the  wool  made  on  one  day 
from  that  made  on  the  next  day.  The  defendant  requested  the  judge 
to  instruct  the  jury  as  follows:  "In  order  to  recover  on  either  the 
first,  second,  or  third  counts  of  its  amended  declaration  the  plaintiff 
must  prove  exactly  5,014  pounds  of  F.  C.  wool  was  separated  into  a 
body  by  itself,  not  mixed  with  or  a  part  of  any  greater  quantity  of 
wool  of  a  different  grade,  or  with  a  greater  quantity  of  F.  C.  wool,  at 
the  time  the  defendant  was  entitled  to  receive  the  wool  the  subject  of 
the  contract.  In  other  words,  the  plaintiff,  under  the  first  three  counts 
of  the  amended  declaration,  must  show  that  the  title  to  5,014  pounds 
of  F.  C.  wool  passed  to  the  defendant,  and  the  title  could  not  so  pass 
until  and  unless  that  exact  quantity  of  F.  C.  wool  was  made  a  distinct 
and  separate  portion  by  itself."  The  judge  adopted  this  instruction, 
and  said  he  would  give  it,  omitting  the  words  "exactly"  and  "exact." 
The  instruction  was  not  given  in  the  words  in  which  it  was  written, 
and  the  defendant  contends  that,  considering  the  whole  charge  to- 
gether, it  was  not  given  in  substance  or  according  to  its  meaning. 

We  do  not  deem  it  necessary  to  determine  the  correctness  of  this 
contention.  The  defendant  concedes  that  some  parts  of  the  charge 
correctly  stated  its  position.  The  fair  interpretation  of  the  request 
is  "that  the  wool  subject  to  the  contract"— that  is,  the  identical  wool 
manufactured  during  the  30  days— must  have  been  separated  from  the 
other  wool  of  the  plaintiff,  so  that  it  could  be  identified,  in  order  to 
entitle  the  plaintiff  to  recover.  We  think  the  presiding  justice  intended 
to  present 'to  the  jury  the  question  raised  by  this  request,  and  we  also 
think  that  there  was  no  evidence  in  the  case  to  warrant  a  finding  for 
the  plaintiff  upon  it.  As  we  understand  the  testimony,  which  is  re- 
ported in  full  in  the  bill  of  exceptions,  the  plaintiff,  in  manufacturing 
the  wool,  weighed  it  as  it  went  into  the  bins,  so  that  the  weight  of 
the  product  of  each  day  was  known.  The  wool  produced  within  the 
30  days  was  weighed  in  the  ordinary  course  of  manufacture,  and  in 
that  way  the  plaintiff  knows  how  many  pounds  are  covered  by  the 
tract.  When  the  plaintiff  undertook  to  deliver  or  to  set  apart  \<>v 
the  defendanl  the  balance  of  the  wool  covered  by  the  contract  remain- 
ing after  the  previous  delivery,  it   shipped  6,223  pounds  instead  of 

;  1    pound   .  the  balance  of  the  amount   which   was  produced   within 

the  30  days.     The  defendant  was  not  hound  to  take  any  wool  except 

■  manufactured  within  the  30  days,  and,  unless  the  plaintiff,  wl 
duty  it  was  to  separate  thai   from  its  other  property,  separated  it  so 
thai  it  could  be  identified,  the  title  to  it   never  passed.     We  find  no 
eni  from  any  witm       indicating  that  it  wa       i    eparated.     A.p 
parently  nothing  was  'lone  under  the  contracl  to  determine  wh.it  ■■ 
belonged  to  tl  ndant.    T  the  weights  as  the  wool  was  man- 

ufactured <hd  not  enable  the  plaintiff  to  d<  termine  whal  portion  of  the 
contents  of  the  bins  was  made  a1  one  time  and  whal  at  another. 
-]•;  reque  I  ol  the  defendant  was  for  a  ruling  thai  on  the  cvi- 


124  EFFECT    IN    PASSING    PROPERTY GOODS    NOT    SPECIFIC 

donee  the  plaintiff  could  not  recover  on  the  first,  second,  or  third  count 
of  its  amended  declaration.  We  think  the  jury  were  erroneously  per- 
mitted to  find  for  the  plaintiff.     *     *     *     Exceptions  sustained. 


III.  Reservation  of  Right  of  Possession  or  Property 


WIGTON  v.  BOWLEY. 

(Supreme  Judicial  Court  of  Massachusetts,  1881.     130  Mass.  252.) 

Tort  for  the  conversion  of  112  barrels  of  flour.  Answer,  a  general 
denial.  The  case  was  submitted  to  the  superior  court,  and,  after  judg- 
ment for  the  defendants,  to  this  court,  on  appeal,  upon  agreed  facts, 
in  substance  as  follows : 

Colt,  J.  Upon  the  agreed  facts,  the  court  below  was  justified  in 
finding  that  the  property  in  the  flour  was  transferred  to  Fenno,  the 
purchaser,  when  it  was  delivered  for  transportation  to  the  railroad 
company  in  Michigan. 

It  appears  that  Fenno,  having  obtained  from  the  plaintiffs  the  price 
asked  for  their  flour  delivered  on  board  the  cars,  ordered  a  car-load 
at  the  price  named,  and  authorized  the  plaintiffs  to  draw  on  him  for 
the  amount  at  ten  days'  sight,  at  the  same  time  giving  references 
to  other  parties  as  to  his  pecuniary  standing.  The  plaintiffs  took 
time  to  satisfy  themselves  as  to  his  responsibility,  and  then  delivered 
the  flour  on  board  the  cars,  directed  to  Fenno  at  Boston,  and  consigned 
to  him.  The  receipt  given  by  the  railroad,  sometimes  called  the  ship- 
ping receipt  or  bill  of  lading,  was  taken  in  his  name.  These  facts 
sufficiently  show  that  the  plaintiffs  did  not  intend  to  retain  their  hold 
on  the  property,  after  it  was  taken  by  the  carrier,  as  security  for  the 
payment  of  the  price. 

In  the  sale  of  specific  chattels,  an  unconditional  delivery  to  the  buyer 
or  his  agent,  or  to  a  common  carrier  consigned  to  him,  whether  a 
bill  of  lading  is  taken  or  not,  is  sufficient  to  pass  the  title,  if  there 
is  nothing  to  control  the  effect  of  it.  If  the  bill  of  lading  or  written 
evidence  of  the  delivery  to  a  carrier  be  taken  in  the  name  of  the  con- 
signee, or  be  transferred  to  him  by  indorsement,  the  strongest  proof 
is  afforded  of  the  intention  to  transfer  the  property  to  the  vendee. 
Merchants'  National  Bank  v.  Bangs,  102  Mass.  291.  If  the  vendor 
intends  to  retain  the  right  to  dispose  of  the  goods  while  they  are  in 
course  of  transportation,  he  must  manifest  that  intention  at  the  time 
of  their  delivery  to  the  carrier.  It  is  not  the  secret  purpose,  but  the 
intention  as  disclosed  by  the  vendor's  acts  and  declarations  at  the  time, 
which  governs.    Foster  v.  Ropes,  111  Mass.  10.    Upton  v.  Sturbridge 

«  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  51-53. 


RESERVATION    OF   RIGHT   OF   POSSESSION   OR   PROPERTY  125 

Mills,  111  Mass.  446.  Where  there  is  conflicting  evidence  as  to  inten- 
tion, the  question  is  for  the  jury.  It  cannot  be  disposed  of  as  matter 
of  law,  unless  the  evidence  will  justify  a  finding  but  one  way.  Na- 
tional Bank  of  Cairo  v.  Crocker,  111  Mass.  163.  National  Bank  of 
Chicago  v.  Bayley,  115  Mass.  228.  Alderman  v.  Eastern  Railroad, 
115  Mass.  233. 

The  plaintiffs  are  proprietors  of  flouring  mills  in  Hart,  Michigan; 
and,  on  October  18,  1878,  they  received  from  Henry  Fenno,  who  was 
then  doing  business  in  Boston,  a  letter  asking  for  the  price  per  car- 
load of  their  flour  delivered  on  board  the  cars.  On  October  28,  the 
plaintiffs  sent  to  Fenno  the  figures  requested;  and,  on  October  31, 
Fenno  ordered  of  the  plaintiffs  a  car-load  of  the  flour  at  the  price 
named,  authorized  them  to  draw  on  him  for  the  amount  at  ten  days' 
sight,  and  referred  them  to  persons  with  whom  he  had  dealt.  The 
plaintiffs,  having  obtained  satisfactory  information  from  the  persons 
indicated  as  to  Fenno's  pecuniary  standing,  on  November  13,  1878, 
loaded  a  car  with  the  flour  ordered,  directed  and  consigned  to  Fenno 
at  Boston;  and,  at  the  same  time,  they  drew  on  Fenno  as  directed. 
The  draft  and  the  bill  of  lading  for  the  flour,  in  which  Fenno  was 
named  as  consignee,  were  sent  to  a  bank  in  Boston,  with  the  instruc- 
tion to  deliver  the  bill  of  lading  to  Fenno,  if  the  draft  was  accepted. 
The  draft  was  never  accepted,  and  the  bill  of  lading  was  never  deliv- 
ered. There  is  no  evidence  to  show  that  it  was  ever  presented  to  Fenno 
for  acceptance. 

On  December  5,  1878,  Fenno  executed  to  the  defendants  an  order 
on  the  freight  agent  of  the  Boston  and  Albany  Railroad  Company  to 
deliver  to  the  defendants  the  flour  in  question;    and  the  defendants 
paid  the  full  purchase  price  of  the  flour  to  Fenno.     The  defendants 
presented  the  order  to  the  freight  agent  of  said  company,  and  he  de- 
livered the  flour  to  them,  according  to  the  usage  of  that  and  other 
railroad  corporations,  without  exacting  the  production  of  the  bill  of 
lading.     On  December  9,  1878,  the  bill  of  lading  and  the  draft  were 
returned  to  the  plaintiffs  by  the  bank.     The  flour  so  delivered  to  the 
ants  is   the   same   flour  which  the  plaintiffs  had  consigned   to 
Fenno.     The  plaintiffs  have  never  received  anything  in  payment  or 
I   payment  thereof.     Fenno  failed  immediately  after  he  executed 
the  order  to  the  defendants,  and  his  testimony  cannot  be  procured  by 
cither  party. 

If,  upon  the  above  facts  and  such  inferences  as  a  jury  would  be 

horized  to  draw,  the  plaintiffs  were  entitled  to  recover,  judgment 
was  to  I"-  entered  for  them  for  $518.56,  and  interesl  from  the  date 
of  the  writ;   otherwise,  ji  :'t  for  the  defendants. 

In  the  case  at  bar,  the  fad  that  the  shipping  receipl  was  not  deliv- 

1  to  Fenno,  bul  was  sent  with  the  draft  to  a  bank  in  Boston,  is  not 

conclusive  evidence,  as  again  I   the  rights  of  the  consignee,  thai  the 

intended  nol  to  pari  with  the  title.     It  was  no  pari  of  the 

contract  of  sale.    It  was  given  in  the  nami   "i   Fenno,  and  could  nol 


126  EFFECT    IN    PASSING    PROPERTY — GOODS    NOT    SPECIFIC 

be  transferred  by  the  plaintiffs  so  as  to  change  title  in  the  property 
without  his  indorsement.  What  passed  between  the  plaintiffs  and 
the  bank  in  Boston,  not  communicated  to  Fenno,  cannot  affect  his 
rights. 

It  is  not  shown  that  the  acceptance  or  payment  of  the  draft  was  a 
condition  precedent  to  a  change  of  title ;  and  the  finding  of  the  court 
below  cannot  be  disturbed.     Judgment  affirmed. 


MOORS  v.  WYMAN. 
(Supreme  Judicial  Court  of  Massachusetts,  18S8.    146  Mass.  60,  15  N.  E.  104.) 

Bill  in  equity  by  Joseph  B.  Moors  against  Ferdinand  A.  Wyman  and 
others.  Two  firms  doing  business  as  F.  Shaw  &  Bros,  made  a  vol- 
untary assignment  to  Wyman,  for  the  benefit  of  creditors,  and  the  bill 
was  to  settle  the  accounts  of  the  assignee.  The  further  facts  sufficiently 
appear  in  the  opinion. 

Holmes,  J.  This  is  a  bill  in  equity,  brought  by  a  creditor  of  the 
Boston  firm  of  F.  Shaw  &  Bros.,  consisting  of  Fayette  Shaw  and 
Brackley  Shaw,  against  that  firm,  against  another  firm  in  Vanceboro, 
Maine,  of  the  same  name,  consisting  of  the  above-named  Shaws  and 
Thaxter  Shaw,  and  against  Ferdinand  A.  Wyman,  to  whom  both  firms 
have  made  voluntary  assignments  for  the  benefit  of  creditors.  As 
the  objections  to  the  jurisdiction  are  now  waived,  and  as  the  assets 
in  controversy  have  been  converted  into  money,  and  a  large  part  of 
the  plaintiff's  claim  has  been  paid,  since  the  filing  of  the  bill,  leaving 
only  certain  items  of  the  account  in  dispute,  only  such  of  the  facts 
need  be  stated  as  are  necessary  in  order  to  settle  these  disputed  items. 
The  plaintiff,  Moors,  made  advances  to  the  Boston  firm  in  several 
ways : 

First.  Under  what  is  called  the  loan  account  agreement,  by  indors- 
ing their  notes,  etc.,  in  Boston,  taking  as  security  bills  of  parcels  of 
specified  hides,  which  the  Vanceboro  firm  were  tanning  for  the  Boston 
firm,  and  which  were  delivered  by  the  Boston  firm  to  and  held  by 
Thaxter  Shaw  as  agent  for  the  plaintiff,  with  the  consent  of  the  Vance- 
boro firm.  The  Vanceboro  firm  agreed  that  the  cost  to  Moors  should 
not  exceed  four  cents  per  pound,  and  in  fact  all  charges  for  tanning 
were  paid  by  the  Boston  firm  to  the  Vanceboro  firm.  By  the  Boston 
firm's  agreement,  Moors  had  power,  in  case  of  default,  or  if  in  his 
opinion  the  collateral  did  not  afford  a  margin  of  25  per  cent,  above 
the  amount  unpaid,  to  sell  at  public  or  private  sale,  without  notice ; 
and  it  was  further  agreed  that  all  collateral  security  held  by  Moors 
for  the  Boston  firm's  account,  whether  under  that  contract  or  other- 
wise, might  be  taken  and  applied  as  general  security  for  all  existing 
or  subsequent  indebtedness.  This  account  has  been  paid  off  in  great 
part  since  the  filing  of  the  bill. 


BESERVATION    OF   RIGHT   OF   POSSESSION   OR   PROPERTY  127 

Second.  The  plaintiff  issued  to  the  Boston  firm  letters  of  credit  on 
Morton,  Rose  &  Co.,  of  London,  under  which  the  firm  bought  hides, 
taking  bills  of  lading  to  the  plaintiff's  order  by  agreement;  the  plain- 
tilt  having  a  lien  on  the  goods,  bills  of  lading,  and  policies  of  insur- 
ance, with  authority  to  take  possession  and  dispose  of  them  at  his 
discretion,  for  his  security  or  reimbursement.  Before  the  defendant's 
failure,  the  practice  was  for  the  plaintiff  to  indorse  the  bill  of  lading 
to  the  Boston  firm,  they  signing  a  contract  by  which  they  received 
the  hides  as  his  agents,  and  agreed  as  such  agents  to  send  the  hides  to 
specified  tanneries  of  theirs  in  Maine  or  New  York,  and  to  deliver 
to  the  plaintiff,  upon  demand,  the  identical  leather  into  which  the 
hides  should  be  manufactured;  the  plaintiff  not  to  be  chargeable 
with  any  expense  thereon.  The  intention  of  the  agreement  was  stated 
to  be  to  protect  and  preserve  unimpaired  the  plaintiff's  lien.  After 
the  failure,  the  plaintiff  took  possession  of  the  hides  as  they  arrived 
and  sold  them  through  reputable  brokers  for  fair  prices.  The  plaint  ill 
has  paid  Morton,  Rose  &  Co.  the  whole  amount  due  them. 

Third.  The  plaintiff  obtained  letters  of  credit  for  the  Boston  firm, 
drawn  upon  the  Bank  of  Montreal  by  the  agents  of  the  bank,  the  Bos- 
ton firm  giving  the  bank  an  agreement  similar  to  that  with  Moors  last 
mentioned,  with  authority  to  the  agents  to  take  possession  of  the  goods, 
and  dispose  of  the  same  at  discretion,  and  to  charge  all  expenses,  in- 
cluding commissions  for  sale  and  guaranty.  Upon  arrival  of  the 
hides,  the  agents  of  the  bank  indorsed  the  bills  of  lading  to  Moors, 
who,  before  the  failure,  indorsed  them  to  the  Boston  firm  under  the 
same  form  of  agreement  as  stated  with  regard  to  bills  of  lading  under 
the  Morton,  Rose  &  Co.  credit.  The  hides  arriving  after  the  failure 
were  sold  by  him  in  like  manner  as  before  stated.  The  plaintiff  has 
paid  the  bank  the  whole  amount  due  to  it. 

It  is  argued  for  the  Shaws  that  Moors  received  the  indorsed  bills 

of  lading  as  agent  of  the  Bank  of  Montreal,  and  that,  however  this 

may  be,  he  has  lost  his  right  in  all  hides  received  by  him  under  any 

bills  of  lading  before  the  failure  and  turned  over  to  the  Boston  firm 

Moors'  agents.     I'm  upon  the  record  before  us,  we  must  lake  it 

that  Moors  received  the  hi  the  master's  report   implies  that  he 

did,  «.n  his  own  behalf.     The  agents  of  the  hank  looked  to  him   for 

payment,  and  they  have  been  paid.     The  hank  had  a  title,  whether 

absolute  or  qualified  .Iocs  not  matter.     See  I  >e  Wolf  v.  Gardner,   I  ' 

Cush.  19, :''  \m.  Dec.  165;  Forbes  v.  Railroad  Co.,  133  Mass.  154,  156; 

Kidder,  L06  X.  Y.  37,  1-'  N.  E.  SIX.     Moors  gol  this  title 

by  indor  ement,  and  had  a  similar  title  originally,  under  the  Morton, 

Rosi  &  Co.  bills  of  lading.     His  indorsement  of  the  bills  of  lading 

the  Boston  firm  as  his  agents  did  not  n  thi    title.     It  was  not  a 

i    ance  in  form,  and  being  made  only  for  the  purpose  of  enabling 

him  to  gel  the  g  From  the  carrier  .  ii  was  nol  a  conveyance  in 

substance  or  (  See  Mooi         Kidder,  ubi  supra;    Pratt  v.  Park 

man,  24  Pick.  \2t  17;   U™  v.  De  Wolf,  8  Pick.  L01,  107. 


12S  EFFECT    IN    PASSING    PROPERTY — GOODS    NOT    SPECIFIC 

Neither  did  Moors  lose  his  rights  by  giving  the  custody  of  the  hides 
to  the  Shaws.  They  expressly  agreed  to  hold  as  Moors'  agents,  and 
the  general  rule  is  perfectly  well  settled  that  the  custody  of  a  servant 
or  of  a  mere  agent  to  hold,  is  the  possession  of  the  master  or  principal. 
The  only  difficulties  that  have  arisen  have  been  due  to  the  failure 
to  distinguish  accurately  between  such  servants  or  agents  and  bailees 
who  hold  in  their  own  name.  Hallgarten  v.  Oldham,  135  Mass.  1,  9, 
46  Am.  Rep.  433.  Or,  in  the  case  of  pledges,  between  a  delivery  to 
the  pledgor,  for  his  own  purposes,  and  intrusting  him  with  the  cus- 
tody on  behalf  of  the  pledgee.  Kellogg  v.  Thompson,  142  Mass.  76, 
79,  6  N.  E.  860.  It  might  be  argued  that  policy  requires  an  exception 
to  be  made  in  favor  of  a  bona  fide  purchaser  for  value  from  the  gen- 
eral owner  having  the  seeming  possession  of  the  goods  as  against  a 
person  whose  security  depended  upon  possession,  and  who  had  made 
the  owner  his  custodian.  But  the  Massachusetts  cases  tend  to  show 
that  there  is  no  such  exception,  in  the  absence  of  fraud.  Kellogg  v. 
Thompson,  Moors  v.  Kidder,  ubi  supra;  Thacher  v.  Moors,  134  Mass. 
156,  165.  At  all  events,  there  is  nothing  in  the  case  to  warrant  our 
making  one,  even  assuming  that  all  parties  before  us  are  not  concluded 
by  the  express  agreement  of  the  Shaws  that  the  plaintiff's  rights  should 
remain.  There  is  nothing  in  Wyman's  position,  as  to  proceeds  in  his 
hands,  to  diminish  the  rights  which  Moors  had  as  against  the  Shaws ; 
nor  do  his  counsel  argue  that  there  is,  so  far  as  the  question  of  pos- 
session is  concerned. 

The  plaintiff  has  charged  a  commission  of  5  per  cent,  on  the  hides 
sold  by  him,  of  which  rather  more  than  nine-tenths  in  value  were  im- 
ported under  the  Morton,  Rose  &  Co.  credit,  the  rest  under  that  of 
the  Bank  of  Montreal.  The  defendants  deny  his  right  to  sell  at  pri- 
vate sale,  and  more  particularly  deny  his  right  to  charge  any  commis- 
sion. We  see  no  reason  to  doubt  that  the  sale  was  lawful,  and  we  are 
of  opinion  that  the  plaintiff  should  be  allowed  the  sum  which  the  mas- 
ter has  found  to  be  a  reasonable  compensation  for  the  services,  actu- 
ally rendered  by  him,  viz.,  two  and  one-half  per  cent,  upon  the  gross 
sales,  or  $5,080.65.  The  argument  is  strong  that  the  loan  account 
agreement,  authorizing  the  plaintiff  to  apply  all  security  to  any  indebt- 
ness,  imports  an  application  in  the  manner  and  with  the  incidents 
there  set  forth,  one  of  which  was  a  charge  of  21^  per  cent,  commission. 
All  of  the  facts  tend  to  the  conclusion  that  a  commission  was  to  be 
charged.     See,  further,  Varnum  v.  Meserve,  8  Allen,  158,  161. 

It  is  admitted  that  there  was  due  to  the  plaintiff  on  April  1,  1886, 
the  sum  of  $61,448.87  as  found  by  the  master.  Adding  the  commis- 
sion, the  amount  is  $66,529.52.  By  the  master's  findings,  the  defend- 
ant Wyman  had  in  his  hands,  on  the  same  date,  $89,533.34  proceeds 
of  the  plaintiff's  security,  or  more  than  enough  to  pay  what  remains 
due,  unless  Wyman  has  a  right  to  make  certain  charges  which  have 
been  disallowed  by  the  master.  The  first  of  these  is  a  charge  of  5 
per  cent,  commission  for  sales  made  by  Wyman.     The  master  found 


RESERVATION   OF   RIGHT    OF   POSSESSION    OR   PROPERTY  129 

no  agreement  to  that  effect  with  the  plaintiff,  and  rightly  disallowed 
the  charge.  There  is  no  reason  why  a  debtor  selling  his  own  prop- 
erty to  pay  his  debt  should  charge  his  creditor  for  doing  so,  and  there 
is  no  reason  why  Wyman,  in  this  respect,  should  stand  in  a  better 
position  than  the  Shaws.  So  far  as  the  sales  were  made  by  agreement, 
the  agreement  excluded  the  right  to  make  a  charge.  It  is  at  least  a 
fair  inference  that  he  made  the  other  sales,  if  rightful,  on  the  same 
footing. 

Mr.  Wyman's  second  charge  is  for  tanning  the  hides  which  were  on 
hand  at  the  time  of  filing  the  bill,  and  which  were  mostly  in  the  process 
of  tanning,  and  could  not  be  removed  without  serious  injury.  The 
master  finds  that  there  was  no  agreement  or  understanding  between 
the  plaintiff  and  Wyman  that  the  latter  should  make  any  charge  to 
the  plaintiff  for  tanning.  One  item  of  $43,29S.64  was  charged  for 
leather  which  Wyman  agreed  to  deliver  to  purchasers,  as  Moors' 
agent,  and  the  proceeds  of  which  in  money  he  further  agreed  to  de- 
liver to  Moors  as  soon  as  received,  his  contract  expressly  stating  that 
Moors  was  not  to  be  chargeable  with  any  expenses  incurred  thereon. 
It  will  be  seen  that  this  agreement  follows  the  form  of  the  original 
contract  of  the  Boston  firm  as  to  letter  of  credit  hides,  with  such  charge 
only  as  was  required  by  the  fact  that  Wyman  received  the  purchase 
money  for  the  leather  in  the  first  place.  We  think  that  the  master 
was  plainly  right  is  disallowing  this  charge. 

The  only  remaining  item  is  $36,710.43,  being  the  difference  between 
four  cents  a  pound  allowed  by  the  master,  and  seven  cents,  the  actual 
cost  of  tanning.  Of  this  sum,  according  to  the  statement  of  Wyman's 
counsel,  $13,972.89  was  for  tanning  loan  account  hides,  for  which  the 
Yanceboro  firm  agreed  that  the  cost  to  Moors  should  not  be  more 
than  four  cents.  In  the  absence  of  agreement  to  the  contrary,  the 
master  was  warranted  in  finding  that  as  to  these  hides  at  least  Wyman 
proceeded  on  the  terms  of  the  contract,  and  could  not  charge  more 
than  four  cents,  if  entitled  to  charge  anything.  There  was  nothing 
to  preclude  such  a  finding  in  the  fact  that  Moors  took  possession  of 
the  bill  of  lading  hides  arriving  after  the  failure,  lie  had  a  right  to 
50,  and,  if  he  bad  not  had,  we  could  not  say,  as  matter  of  law  or 
fact,  that  his  doing  so  imported  a  repudiation  of  the  distinct  contract 
relations  as  to  tin-  loan  account  hides  in  the  tannery. 

There  is  left,  then,  only  $22,737.54  in  dispute,  which  might  be  de- 
ducted from  the  amount  in  Wyman':,  hinds  and  yet  leave  enough  to 
pay  the  plaintiff.     As  to  this  sum  we  think   that   the  allowance  of   four 

sufficiently  favorable  to  the  defendants,  and,  if  it  were  neces- 
.  further,  in  order  to  secure  the  plaintiff's  rights,  we  should 

e  Some  difficulty  in  finding  a  warrant   for  making  any  allowance  at 

all.    The  hid'  hill  of  lading  hides,  which  by  the  original  agi 

nient  were  to  he  manufactured  into  leather  without  any  <  e  to 

Ors  or  the  hank.      Such   hill   of   lading   hide,   as  Wyman   did   make 
Com  i  -,  <    i  -9 


130  EFFECT    IN    PASSING    PROPERTY — GOODS    NOT    SPECIFIC 

an  agreement  about  he  undertook  to  deal  with  in  the  same  way.  On 
these  facts  alone  the  argument  against  his  right  to  charge  is  strong. 
But,  further,  bearing  in  mind  that  these  hides  were  to  be  tanned  and 
held  by  the  Boston  firm,  and  that  the  Vanceboro  firm  had  nothing 
to  do  with  them,  if  that  fact  be  material,  it  is  to  be  observed  that 
alien  the  holder  of  the  equity  of  redemption  in  property,  or  of  a  kin- 
dred interest,  makes  improvements  upon  it  necessary  to  preserve  it 
from  destruction  or  great  loss,  he  may  be  presumed  to  make  such 
improvements  in  the  interest  of  the  equity,  for  the  purpose  of  at  least 
diminishing  the  claim  upon  his  general  funds  not  pledged,  and,  if  pos- 
sible, of  obtaining  a  surplus.  Undoubtedly  it  was  for  the  interest  of 
the  creditors  of  the  Boston  firm  that  the  hides  should  be  tanned,  rather 
than  be  spoiled.  The  principle  is  the  converse  of  that  which  allows 
a  mortgagee  to  charge  for  reasonable  improvements.  Merriam  v.  Goss, 
139  Mass.  77,  82,  28  N.  E.  449. 

There  are  obvious  objections  to  allowing  the  holder  of  the  equity  to 
create  a  lien  superior  to  an  existing  mortgage.  Even  if  the  Vanceboro 
firm  were  concerned,  it  would  not  necessarily  change  our  opinion  upon 
the  matter,  in  view  of  the  circumstances  of  this  case.  Decree  accord- 
ingly. 


FRAUD    AND    RETENTION    OF    POSSESSION  131 


FRAUD  AND  RETENTION  OF  POSSESSION 
I.  Contract  or  Sale  Induced  by  Fraud  x 


ADAM,  MELDRUM  &  ANDERSON  CO.  v.  STEWART. 

(Supreme  Court  of  Indiana,  1901.     157   I  ml.  GTS,  Gl  N.  E.  1002,  fciT  Am.  St. 

Rep.  240.) 

See  post,  p.  136,  for  a  report  of  the  case. 


CUNDY  v.  LINDSAY. 
(ITouse  of  Lords,  1S7S.    L.  R.  3  App.  Cas.  459.) 
See  post,  p.  139,  for  a  report  of  the  case. 


II.  Remedies  of  Defrauded  Party  2 
1.  Bona  Fide  Purchasers  from  Fraudulent  Buyer 


SCHLOSS  v.  FELTUS. 

(Supreme  Court  of  Michigan,  1S95.    103  .Mich.  525,  01  N.  W.  797,  ,°.G  L.  R. 

A.  161.) 

On  rehearing.  For  original  opinion,  see  55  N.  W.  1010,  96  Mich. 
619,  36  L.  R.  A.  161. 

McGrath,  C.  J.3  Upon  rehearing,  after  the  fullest  consideration, 
we  find  no  reason  to  change  the  former  opinion.  96  Mich.  619,  55 
X.  \V.  1010,  50  I,,  k.  A.  I'll.  The  principal  question  in  the  case  is 
whether  a  naked,  pn  i  isting  debt  is  such  a  consideration  or  pay- 
ment   for   the   transfer  Of   a   stock  of   goods  as   will   defeat    replevin   by 

the  original  vendor,  win.  sets  up  fraud  in  the  purchase  from  him. 
The  rule,  as  laid  down  in  10  Am.  &  Eng.  Enc.  Law,  x.^7,  is  that  a  pre 

tin--  debt  is  not  such  a  consideration  as  will  sustain  tin-  plea  of 
"bona  tide  purchaser  for  value,"  excepl  in  the  case  "i  negotiable 
paper.     The  <  ited  will  be  found  to  fully  support  the  text.     Oth- 

ascs  will  be  found  collected  in  Tied.  Sales,  $  329;  Mil.  Sales,  p. 

i  For  <n  eusslon  <<f  principles,  sec  Tiffany,  Bales  (2d  Ed.)  If  54,  55. 

i  For  'h  en    i i  principle  .  Bee  Tiffany,  Sales  (2d  Ed  I       56,  57. 

•  The  dissenting  opinion  of  Montg »ry,  J.,  Is  omitted. 


132  FRAUD    AND    RETENTION    OP    POSSESSION 

382;  and  Benj.  Sales  (6th  Ed.)  p.  448.  Mr.  Tiedeman  says:  "Al- 
though there  are  a  few  cases  which  maintain  that  a  pre-existing  debt 
is  a  sufficient  consideration,  the  better  opinion  is  that  it  is  not  suffi- 
cient, because  there  is  no  parting  with  value  in  reliance  upon  the  title 
to  the  goods  thus  acquired,  and  that  an  attaching  or  other  creditor 
is  not  a  bona  fide  purchaser." 

Some  of  the  cases  would  seem  to  make  a  distinction  between  a 
receipt  of  property  in  payment  of  a  pre-existing  indebtedness,  and  a 
receipt  in  satisfaction  or  discharge  of  such  debt;  that  a  satisfaction 
can  only  result  from  an  agreement  to  that  effect,  but  payment  op- 
erates as  a  discharge  or  satisfaction  of  the  debt,  and  in  either  case 
the  failure  of  title  revives  the  debt.  The  case  of  Dickerson  v.  Tilling- 
hast,  4  Paige  (N.  Y.)  215,  25  Am.  Dec.  528,  was  a  bill  to  foreclose  a 
mortgage  given  by  Catherine  Tillinghast.  Defendant,  Charles  T., 
was  the  son  of  the  mortgagor,  who  received  a  conveyance  of  the 
premises  from  his  mother,  subsequent  to  the  mortgage,  the  consider- 
ation for  which  was  a  debt  due  the  son  from  his  mother.  Baze  v. 
Arper,  6  Minn.  220  (Gil.  142),  was  a  case  of  where  the  only  consid- 
eration for  a  deed  of  land  was  a  precedent  debt.  Root  v.  French,  13 
Wend.  (N.  Y.)  570,  28  Am.  Dec.  482,  was  a  case  of  where  a  grocer 
had  assigned  his  stock  of  goods  to  indemnify  the  assignee  against 
liability  as  indorser  for  the  assignor.  No  distinction  is  made  be- 
tween a  conveyance  in  payment  of  a  debt  and  one  given  as  security 
therefor.  This  court  has,  in  a  number  of  cases,  recognized  the  rule 
as  applicable  to  conveyance  as  security  for  a  pre-existing  debt.  Box- 
heimer  v.  Gunn,  24  Mich.  372;  Kohl  v.  Lynn,  34  Mich.  360;  Mc- 
Graw  v.  Solomon,  83  Mich.  442,  47  N.  W.  345 ;  Edson  v.  Hudson, 
83  Mich.  450,  47  N.  W.  347. 

But  it  is  insisted  that  under  our  authorities  this  is  the  limit  of  the 
rule,  and  Bostwick  v.  Dodge  (decided  in  1844)  1  Doug.  (Mich.) 
413,  41  Am.  Dec.  584,  Outhwite  v.  Porter  (1865)  13  Mich.  533,  and 
Hanold  v.  Kays  (1887)  64  Mich.  439,  31  N.  W.  420,  8  Am.  St.  Rep. 
835,  are  cited  to  support  that  contention.  In  Bostwick  v.  Dodge, 
Bostwick  gave  his  note  to  one  Hooper,  who  indorsed  it  over  to 
Dodge  in  payment  of  a  debt  due  from  Hooper  to  Dodge.  The  court 
in  that  case  say:  "It  had  been  long  and  uniformly  held  that  the 
extinguishment  of  a  pre-existing  debt  was  as  valid  and  sufficient  a 
consideration  for  the  transfer  of  a  negotiable  instrument  as  the  pay- 
ment of  money,  or  the  delivery  of  any  species  of  property  whatever.. 
That  the  rule  is  one  of  great  convenience  and  necessity,  even,  to  a 
commercial  community,  is  too  obvious  to  require  illustration,  and  its 
adoption  in  no  way  contravenes  the  principles  of  natural  justice." 
In  Outhwite  v.  Porter,  Porter  held  notes  made  by  one  Cantine. 
Outhwite  bought  out  Cantine's  business,  and  Porter  surrendered 
Cantines'  notes,  taking  from  Outhwite  the  latter's  notes.  Although 
Bostwick  v.  Dodge  is  cited,  the  court  held  that  Cantine  had  been 
released ;  that  it  was  a  case  of  novation  by  the  substitution  of  one 


REMEDIES   OF   DEFRAUDED   PARTY  lo3 

debtor  for  another,  by  the  assent  of  the  three  parties.  In  Hanold  v. 
Kays,  K.  was  indorser  upon  certain  outstanding  notes  made  by  one 
O.  In  consideration  of  K.'s  agreement  to  take  up  and  pay  said  notes, 
O.  conveyed  certain  land  to  K.  The  court  say  that  K.  had  paid  the 
notes  before  notice,  and  that  such  payment  formed  a  sufficient  con- 
sideration for  the  deed.  It  had  been  repeatedly  held  by  this  court 
that  an  agreement  to  pay — a  mere  executory  contract — is  not  a  suffi- 
cient consideration,  but  that  payment  actually  and  in  good  faith  made 
before  notice  entitied  the  vendee  to  protection,  and  such  is  the  uni- 
versal rule.  In  that  case,  however,  the  court  uses  language  unneces- 
sary for  the  determination  of  that  case,  and  regards  Bostwick  v. 
Dodge  as  authority  for  saying  that  one  who  takes  a  deed  of  land  in 
absolute  payment  of  a  debt  due  him  is  a  bona  fide  holder  for  value. 

From  an  examination  of  the  authorities,  however,  it  will  clearly 
appear  that  the  rule  laid  down  in  Bostwick  v.  Dodge  is  an  exception 
'to  the  general  rule,  and  the  difficulty  with  the  Hanold  Case  is  that  it 
substitutes  a  recognized  exception  for  the  rule.  In  Currie  v.  Misa, 
L.  R.  10  Exch.  153,  Lord  Coleridge,  in  a  dissenting  opinion, — his 
contention  being  that  the  exception  did  not  apply  to  a  mere  check  in 
the  hands  of  a  holder  for  value, — says :  "It  is  too  late  to  dispute  that 
a  pre-existing  debt,  due  to  the  transferee  of  a  bill,  entitles  him  to  all 
the  rights  of  a  holder  for  value.  But  it  seems  equally  clear  that  this 
is  an  exception  to  general  rules, — an  extraordinary  protection  given 
to  such  holder  on  grounds  of  commercial  policy  only,  and  in  order 
to  favor  the  unrestricted  use,  as  currency,  of  negotiable  instruments." 
In  Whistler  v.  Forster,  14  C.  B.  (N.  S.)  248,  it  is  said :  "The  general 
rule  of  law  is  undoubted  that  no  one  can  transfer  a  better  title  than 
he  himself  possesses.  To  this  there  are  some  exceptions,  one  of 
which  arises  out  of  the  rule  of  the  law  as  to  negotiable  instruments. 
These,  being  part  of  the  currency,  are  subject  to  the  same  rule  as 
money;  and  if  such  an  instrument  be  transferred  in  good  faith,  for 
value,  before  it  is  overdue,  it  becomes  available  in  the  hands  of  the 
holder,  notwithstanding  fraud  which  would  have  rendered  it  un- 
available in  the  hands  of  a  previous  holder."  In  Bay  v.  Coddington, 
5  Johns.  Ch.  (N.  Y.)  54,  9  Am.  Dec.  26S,  the  exception  is  recognized, 
but  the  court  refused  to  apply  the  principle  to  that  ease  as  made. 
In  Dickerson  v.  Tillinghast,  supra,  the  case  of  Bay  v.  Coddington  was 
referred  to  as  sustaining  the  rule  adopted;  but,  although  Bay  v. 
I  been  overruled,  the  rule  of  D  on  v.  Tillingha  i 

remain,  the  law  of  thai  The  cases  in  support  of  the  rule 

ting  commercial  paper  are  collected  in  1  Rand.  Com.  Taper,  §§ 
•I'd,  465,  and  the  subjeel  is  referred  to  in  2  Am.  &  Eng.  Enc.  haw, 
392. 

There  are  authorities  which  refuse  to  recognize  either  rule  or  ex- 
ception, bul  the  rule  is  supported  by  the  greal  weighl  of  authoril 
The  serious  conflicl  to  the  r<  ition  of  th<  ption  in  favor 

of  commercial  paper.    Our  own  conn,  in  Bostwick  v.  Dodge,  ha 


134  FRAUD    AND    RETENTION    OF    POSSESSION 

determined  that  question;  and  the  rule  there  laid  down  must  be  re- 
garded  as  an  exception  to  the  general  rule  of  law,  and  cannot  be 
carried  beyond  the  necessity  that  gave  rise  to  it.  The  doctrine  of 
that  case  has  no  application  to  the  transfer  of  a  nonnegotiable  instru- 
ment. In  Whistler  v.  Forster,  supra,  the  court  refused  to  apply  it, 
for  the  reason  that  the  paper  was  not  indorsed  until  after  notice. 
The  term  "bona  fide  purchaser"  is  borrowed  from  equity  jurispru- 
dence, and  must  be  interpreted  accordingly.  Mr.  Pomeroy,  in  his 
Equity  Jurisprudence,  says:  "There  must  be  actual  payment  before 
notice,  or  what  in  law  is  tantamount  to  actual  payment, — a  transfer 
of  property  or  things  in  action,  or  an  absolute  change  of  the  pur- 
chaser's legal  position  for  the  worse,  or  the  assumption  by  him  of 
some  new,  irrevocable,  legal  obligation."     Sections  747,  749-751. 

It  is  well  settled  by  our  own  court  that  one  must  pay  as  well  as 
purchase.  Thomas  v.  Stone  (1843)  Walk.  Ch.  117;  Dixon  v.  Hj]l 
(1858)  5  Mich.  404;  Warner  v.  Whittaker,  6  Mich.  133,  72  Am.  Dec. 
65;  Blanchard  v.  Tyler,  12  Mich.  339,  86  Am.  Dec.  57;  Stone  v. 
Welling,  14  Mich.  514,  Matson  v.  Melchor,  42  Mich.  477,  4  N.  W. 
200.  In  Blanchard  v.  Tyler,  one  Hearse  claimed  to  be  a  bona  fide 
purchaser.  He  paid  nothing  to  Tyler.  Tyler  was  owing  him  about 
$7.50,  which  was  to  apply  on  the  purchase,  and  he  gave  a  nonnego- 
tiable note  for  $600,  less  $7.50.  The  note  was  to  be  paid  by  turning 
out  other  notes,  and  this  was  not  done  until  some  time  afterwards. 
The  court  held  that  H.  was  not  a  bona  fide  purchaser ;  that  whatever 
he  paid  was  after  notice,  and  such  payment  was  made  in  his  own 
wrong.  In  Stone  v.  Welling,  Stone  filed  a  bill  to  foreclose  a  mort- 
gage given  by  Hart,  making  Welling  (a  subsequent  purchaser)  a 
party  defendant.  The  consideration  for  the  deed  from  Hart  to  Well- 
ing was  an  agreement  by  the  latter  to -give  up  to  the  former  certain 
judgments  and  notes  held  by  Welling  against  Hart,  and  to  release  the 
latter  from  an  existing  indebtedness.  Mr.  Justice  Cooley,  for  the 
court,  says:  "But  the  question  in  this  case  is  whether  there  was 
an  actual  payment  of  value  for  the  land  by  Welling  before  notice  of 
complainant's  mortgage ;  and,  to  make  the  agreement  amount  to 
such  a  payment,  it  must  at  least  have  been  one  which  Hart,  at  the 
time,  could  have  enforced  as  a  discharge  against  Welling  &  Root. 
The  evidence  shows  that  the  agreement  was  wanting  in  the  consider- 
ation agreed  upon,  since  the  land  covered  by  the  deed  had  previous- 
ly been  incumbered  by  the  mortgage  to  complainant.  There  was 
no  impediment,  therefore,  to  Welling  &  Root  proceeding  in  the  col- 
lection of  their  demands  against  Hart  &  Williams,  if  the  facts  had  all 
been  made  known  to  them." 

In  Chachvick  v.  Broadwell  (1873)  27  Mich.  6,  the  logs  had  been 
transferred  to  Chadwick  in  payment  of  the  balance  due  on  the 
stumpage  contract  between  Chadwick  and  Lester ;  but  the  court 
intimated  that  Chadwick  had  paid  nothing,  and  that,  had  the  pur- 
chase failed  by  reason  of  the  fact  that  Mrs.  Broadwell  insisted  upon 


REMEDIES    OF    DEFRAUDED    PARTY  135 

her  legal  rights,  the  debt  against  Lester  remained.  In  Battershall 
v.  Stephens  (1876)  34  Mich.  68,  73,  Mr.  Justice  Graves  refers  approv- 
ingly to  the  rule  that  in  case  the  consideration  is  merely  a  past  in- 
debtedness, the  purchaser  is  not  entitled  to  be  regarded  as  a  bona 
fide  purchaser.  In  Boxheimer  v.  Gunn,  24  Mich.  372,  Mr.  Justice 
Christiancy  uses  this  language :  "The  defendant's  answer,  as  we 
have  already  seen,  alleges  the  conveyance  to  Sutton  to  have  been 
made  to  him  merely  as  a  security  for  a  precedent  debt,  and  does  not 
claim  that  any  other  consideration  was  paid  or  agreed  to  be  paid, 
or  that  the  form  of  the  debt  was  changed,  or  that  he  had  relinquished 
any  remedy  in  consideration  of  the  conveyances,  or,  finally,  that  his 
own  position  would  not  be  equally  as  good  to-day,  if  the  conveyance 
should  turn  out  to  be  utterly  valueless,  as  it  was  before  the  convey- 
ance. He  has  not,  therefore,  by  his  answer,  placed  himself  in  the 
position  of  a  bona  fide  purchaser  or  incumbrancer  for  the  value,  with 
equities  superior  to  those  of  the  complainant,  though  it  should  be 
admitted  that  he  acted  in  good  faith,  and  without  notice;"  citing- 
Stone  v.  Welling,   14  Mich.  514. 

It  certainly  could  not  have  been  intended,  in  view  of  the  authori- 
ties referred  to,  that  an  unexecuted  agreement  to  pay  would  con- 
stitute a  bona  fide  purchaser.  I  do  not  desire  to  be  understood  as 
saying  that  an  agreement  to  extend  the  time  of  payment  may  not  be 
such  a  consideration  as  will  support  a  mortgage  given  for  a  pre-exist- 
ing debt,  nor  that  the  release  of  security,  or  perhaps  the  surrender 
of  evidences  of  indebtedness,  may  not  be  a  sufficient  present  consid- 
eration to  uphold  a  conveyance  made  in  payment  of  a  pre-existing 
debt.  In  the  present  case  there  was  no  change  in  the  form  of  the 
debt.  It  is  urged  that  the  vendor  had  other  property  out  of  which 
the  purchaser  might  have  made  his  debt.  It  is  not  necessary  to  pass 
upon  that  question.  The  transfer  was  made  October  1st,  and  on  the 
4th  of  the  same  month  the  vendee  was  notified  of  plaintiff's  claim. 
There  is  no  evidence  of  any  change  in  the  debtor's  circumstances  re- 
specting  such  other  property,  if  he  had  any,  between  those  dates. 
I  inder  the  rule  laid  down  in  Stone  v.  Welling,  the  creditor  could  then 
have  avoided  the  discharge  or  relea  e  of  the  debt,  to  the  extenl  of 
the  fail  title.     As  to  the  rule  that  the  purchaser  is  entitled  to 

protection  only  to  the  extent  of  payments  actually  made  at  thi  time 
(jf  the  notice,  see,  also,  Dickinson  v.  Wright,  56  Mich.  42,  22  \\  W. 
312,  and  Sheldon  v.  Holmes,  58  Mich.  1,38,  24  X.  W.  7'*?. 

We  did  not  deem  it  necessary  in  the  former  opinion  to  discuss  oth- 
er questions  raised  by  the  record,  and  do  not  now.  The  judgment 
must  be  reversed,  and  a  n<  w  trial  ordered. 


loG  FRAUD    AND    RETENTION    OF    POSSESSION 

ADAM,  MELDRUM  &  ANDERSON  CO.  v.  STEWART. 

(Supreme  Court  of  Iudiaua,  1901.     157  Ind.  67S,  61  N.  E.  1002,  S7  Am.  St. 

Rep.  210.) 

Action  by  the  Adam,  Meldrum  &  Anderson  Company  against 
Thomas  Stewart  and  others.  From  a  judgment  for  defendants, 
plaintiff  appeals. 

Hadley,  J.  Appellant,  a  corporation,  as  a  vendor,  brought  re- 
plevin to  recover  of  the  mortgagee  of  its  vendee  certain  merchandise 
alleged  to  have  been  fraudulently  purchased.  The  venue  was  changed 
to  the  Wabash  circuit  court.  Judgment  for  the  appellees.  No  ques- 
tion arises  upon  the  pleadings.  The  only  error  assigned  is  the  over- 
ruling of  appellant's  motion  for  a  new  trial,  which  challenges  the 
sufficiency  of  the  evidence  to  support  the  finding,  and  certain  rulings 
of  the  court  on  proffered  testimony. 

The  material  undisputed  facts  follow:  Appellee  Stewart  on  the 
26th  day  of  November,  1897,  was  engaged  as  a  retail  dry  goods  mer- 
chant in  Huntington,  Ind.  For  several  years  he  had  bought  most 
of  his  goods  of  appellant,  engaged  in  the  wholesale  dry  goods  busi- 
ness in  Buffalo,  N.  Y.  February  18,  1895,  when  he  was  establish- 
ing his  business  at  Huntington,  he  borrowed  $5,000  of  his  wife,  Isa 
A.  Stewart,  for  which  he  executed  to  her  on  that  date  his  note,  bear- 
ing 6  per  cent,  interest  from  date  until  paid.  Soon  after  the  begin- 
ning of 'his  business  at  Huntington,  Stewart  opened  an  account  with 
appellant  for  goods,  which  at  the  close  of  1896  he  had  suffered  to 
run  against  him  for  about  $4,000.  At  this  time  he  had  never  sub- 
mitted, or  been  requested  to  submit,  to  appellant  a  statement  of  his 
assets  and  liabilities ;  but,  upon  the  receipt  from  appellant  of  a  semi- 
annual statement  of  his  account,  Stewart  voluntarily,  in  explana- 
tion of  his  default  in  payments,  on  January  7,  1897,  made  in  writing 
a  statement  showing  $10,500  capital  over  liabilities,  which  at  best 
was  erroneous  by  the  amount  he  owed  his  wife,  and  $2,000  to  the 
First  National  Bank  of  Huntington.  Appellant's  credit  man  testi- 
fied that,  believing  and  relying  upon  the  truth  of  the  statement,  he 
extended  indulgence,  and  thereafter,  beginning  on  February  13, 
1897,  and  ending  October  27,  1897,  in  the  usual  course  of  trade,  the 
house  sold  Stewart  by  a  traveling  salesman,  43  additional  bills,  rang- 
ing from  $6.83  to  $602,  and  aggregating  $6,115.  In  the  same  period 
Stewart  made  appellant  divers  payments  on  account,  amounting  to 
$3,397,  and  returned  goods  not  ordered,  on  several  occasions,  amount- 
ing to  $189,  and,  as  testified  by  Stewart,  and  which  seems  not  to 
have  been  denied,  on  November  15,  1897,  paid  appellant,  on  the 
goods  sued  for,  $257.  On  June  5,  1897,  Stewart  again  wrote  appel- 
lant, "Our  liabilities,  outside  of  yourselves,  are  less  than  ever,  and 
.  are  simply  nominal."  In  the  autumn  of  1897  appellant  urged  Stew- 
art to  secure  his  indebtedness,  and  on  November  26,  1897,  he  execut- 


REMEDIES   OF   DEFRAUDED   PARTY  137 

ed  three  notes, — one  to  his  wife  for  $5,831,  being  a  renewal  of  her 
former  note,  with  interest  accrued  to  date;  one  to  Breen  for  $500, 
being  for  past  and  then  contracted  indebtedness;  and  one  to  Isen- 
hauer  for  $85  for  rent  then  due;  each  of  said  three  notes  made  pay- 
able in  bank  at  one  day  after  date, — and  at  the  same  time  executed 
to  appellee  Schuckman,  as  trustee,  a  chattel  mortgage  on  his  entire 
stock  in  trade  to  secure  said  three  notes  and  one  payable  to  the  First 
National  Bank  of  Huntington,  of  previous  date,  for  $1,500.  Schuck- 
man took  immediate  possession  under  the  mortgage.  On  the  fol- 
lowing day  (November  27th)  appellant  brought  this  suit  against 
Schuckman,  trustee,  and  Stewart,  to  recover  all  goods  sold  to  Stew- 
art after  the  erroneous  statement  of  January  7,  1897. 

These  facts,  it  is  argued",  show  (1)  that  Stewart  got  possession  of 
the  goods  delivered  to  him  by  the  appellant  between  the  dates  of 
January  7,  and  November  26,  1897,  by  such  active  fraud  as  empow- 
ered appellant  to  rescind  the  contracts  of  sale  and  retake  the  goods ; 
and  (2)  that  they  do  not  show  that  the  beneficiaries  of  the  chattel 
mortgage  to  Schuckman,  trustee,  are  innocent  purchasers  for  value, 
within  the  meaning  of  the  law.  The  first  of  these  propositions  be- 
comes immaterial  if  the  second  should  be  determined  against  appel- 
lant's contention.  No  claim  is  made  that  either  of  the  debts  secured 
by  the  mortgagor  is  invalid,  or  that  either  of  the  mortgage  beneficia- 
ries had  any  notice  or  knowledge  of  the  false  representations  made  by 
Stewart  to  appellant. 

It  may  be  stated  as  a  general  rule  that  a  mortgage  made  to  secure 
an  antecedent  debt  will  not  be  sustained  against  a  vendor  who  has 
been  induced  to  part  with  the  mortgaged  property  by  the  fraud  of 
the  mortgagor.  In  such  cases  equity  will  restore  to  the  defrauded 
vendor  that  which  is  rightfully  his,  when  in  the  doing  it  only  takes 
from  the  mortgagee  the  advantage  of  his  security,  which  has  cost 
him  nothing,  and  leaves  to  him  unimpaired  all  his  rights  under  the 
original  contract.  Curme,  Dunn  &  Co.  v.  Rauh,  100  Ind.  247 ; 
Adams  v.  Vanderbeck,  148  Ind.  92,  45  N.  E.  645,  47  N.  E.  2A. 
Am.  St.  Rep.  497;  Cobbey,  Repl.  §  286,  and  cases  cited;  Tiff.  Sales, 
p.  122,  and  cases  cited  ;  Burdick,  Sales,  p.  169.  But  a  moil 
cuted  by  a  fraudulent  purchaser  upon  goods  that  have  come  into  his 
possession  in  the  usual  course  of  trade,  and  over  which  he  has  con- 
tinued to  exercise  dominion  and  give  forth  the  appearance  of  owner- 
ship by  mixing  and  exposing  them  to  sales  with  his  other  goods, 
will  be  held  valid  as  to  a  mortgagee  who,  in  consideration  <>f  the 
mon  .  and  without  notice  of  tin-  fraud,  has  extended  the  time 
of  paymenl  of  his  debt,  or  assumed  any  new  or  additional  obligation, 
hrisl   v.  G  I  Ind.  576,  30  Am.   Rep.  250;  Investment  Co. 

v.  Harris,  II.-'  tnd.  226,  238,  40  X.  E.  1072,  41   \.  E.  -151:  Rool  v. 
Frei    h,  13  Wend.  (N.  Y.i  570,  28   \m.  I'  irs  v.  Waples, 

3  Houst.  (Del.)  581;  Shufeldl  v.  Pease,  16  V\  i  659;  Dock  Co.  v. 
j  .  Cobb.  ..  Repl.  ,  415;  Tied.  Sales,  §  327. 


138  FRAUD    AND    RETENTION    OF    POSSESSION 

The  facts  of  the  case  are  that  in  consideration  of  the  mortgage  Mrs. 
Stewart  accepted  a  renewal  of  her  note,  and  extended  the  time  of 
payment  of  her  deht;  Eisenhauer  accepted  a  note,  and  extended  the 
time  of  payment  of  his  past-due  account;  Brcen  accepted  a  note  for 
$500,  payable  in  bank  one  day  after  date,  $250  of  which  was  for  a 
past-due  account,  and  $250  for  legal  services  then  contracted  for, 
to  be  then  and  thereafter  rendered.  These  persons,  having  no  notice 
of  Stewart's  fraud  in  the  purchase  of  the  goods,  if  there  was  any, 
and  having  all  surrendered  the  right  to  sue  their  debtor  for  a  definite 
period,  and  Breen  having  assumed  a  new  obligation,  must  be  classed 
as  innocent  purchasers  for  value,  within  the  rule  above  stated.  The 
fact  that  the  mortgage  to  the  First  National  Bank  of  Huntington 
rested  solely  upon  a  pre-existing  debt  cannot  affect  the  decision  of 
the  case.  Schuckman's  possession  of  the  property  as  the  trustee  of 
Mrs.  Stewart,  Eisenhauer,  and  Breen  is  rightful,  and  replevin  will 
not  lie  against  one  legally  in  possession,  in  favor  of  one  who  has 
no  superior  right. 

The  judgment  of  the  circuit  court  is  right  for  another  reason :  It 
is  a  familiar  rule  that  a  contract  induced  by  fraud  is  not  void,  but 
voidable  only,  at  the  option  of  the  party  defrauded.  It  rests  solely 
with  the  defrauded  party  to  say  whether  or  not  the  contract  shall 
stand,  and  until  repudiated  by  him  it  is  valid.  He  may  abide  the 
contract  and  seek  redress  in  damages,  or,  if  he  acts  within  a  reason- 
able time  after  discovery  of  the  fraud,  he  may  rescind  the  contract 
and  reclaim  his  property.  But  if  he  elects  to  rescind  there  must  be 
a  complete  restoration  of  everything  of  value  the  party  defrauded 
has  received  under  the  contract.  He  will  not  be  permitted  to  undo 
the  contract,  while  retaining  the  money  or  other  valuable  thing  de- 
livered him  under  its  terms.  Thompson  v.  Peck,  115  Ind.  512,  18 
N.  E.  16,  1  L.  R.  A.  201 ;  Haase  v.  Mitchell,  58  Ind.  213 ;  Balue  v. 
Taylor,  136  Ind.  368,  36  N.  E.  269;  Tiff.  Sales,  p.  119;  Tied.  Sales, 
§  163.  It  is  shown  by  the  record  that  Stewart  testified  that  on  No- 
vember 15,  1897,  11  days  before  the  execution  of  the  mortgage  to 
Schuckman,  trustee,  and  9  months  after  the  first  purchase  of  goods 
subsequent  to  the  January  7,  1897,  statement  of  assets  and  liabilities, 
complained  of,  he  paid  appellant  on  the  goods  sued  for  $257.  It  does 
not  appear  that  the  testimony  was  denied  by  appellant,  and  it  must  be 
accepted  as  true.  The  sum  thus  paid  was  not  returned  or  tendered 
to  appellees  before  the  commencement  of  this  suit,  which  of  itself  is 
fatal  to  appellant's  right  of  recovery. 

The  propositions  arising  upon  the  admission  and  rejection  of  tes- 
timony relate  exclusively  to  the  question  of  Stewart's  fraud,  which 
we  have  found  unnecessary  to  consider.     Judgment  affirmed. 


eemedies  of  defrauded  paety  139 

2.  Fraudulent  Impersonation 


CUNDY  v.  LINDSAY. 
(House  of  Lords,  18TS.    L.  It.  3  App.  Cas.  459.) 

In  1873,  one  Alfred  Blenkarn  hired  a  room  at  a  corner  house  in 
Wood  street,  Cheapside.  It  had  two  side  windows  opening  into 
Wood  street,  but,  though  the  entrance  was  from  Little  Love  Lane,  it 
was  by  him  constantly  described  as  37  Wood  street,  Cheapside.  Hi- 
agreement  for  this  room  was  signed  "Alfred  Blenkarn."  The  now 
respondents,  .Messrs.  Lindsay  &  Co.,  were  linen  manufacturers,  carry- 
ing on  business  at  Belfast.  In  the  latter  part  of  1873,  Blenkarn  wrote 
to  the  plaintiffs  on  the  subject  of  a  purchase  from  them  of  goods  of 
their  manufacture— chietly  cambric  handkerchiefs.  His  letters  were 
written  as  from  ''Z7  Wood  street,  Cheapside,"  where  he  pretended 
to  have  a  warehouse,  hut  in  fact  occupied  only  a  room  on  the  top 
floor,  and  that  room,  though  looking  into  Wood  street  on  one  side. 
could  only  be  reached  from  the  entrance  in  5  Little  Love  Lane.  The 
name  signed  to  these  letters  was  always  signed  without  any  initial  as 
representing  a  Christian  name,  and  was,  besides,  so  written  as  to 
appear  "Blenkiron  &  Co."  There  was  a  highly  respectable  firm  of 
W.  Blenkiron  &  Son,  carrying  on  business  in  Wood  street,  but  at  num- 
ber 123  Wood  street,  and  not  at  37.  Messrs.  Lindsay,  who  knew  the 
respectability  of  Blenkiron  &  Son,  though  not  the  number  of  the 
house  where  they  carried  on  business,  answered  the  letters,  and  sent 
the  goods  addressed  to  "Messrs.  Blenkiron  &  Co.,  37  Wood  Street. 
Cheapside,"  where  they  were  taken  in  at  once.  The  invoices  sent  with 
the  goods  were  always  addressed  in  the  same  way.     Blenkarn  sold  the 

»ds  thus  fraudulently  obtained   from   Messrs.  Lindsay  to  different 
.  and  among  the  rest  lie  sold  250  dozen  of  cambric  handker- 
chiefs to  the  Messrs.  Cundy,  who  were  bona  fide  purchasers,  and  who 
resold  them  in  the  ordinary  way  of  their  trade.     Payment  not  being 
made,  an  action  was  commenced  in  the  mayor's  court  of  London  by 
.   Lindsay,  the  junior  partner  of  which  firm,   Mr.  Thompson, 
made  the  ordinary  affidavit  of  debt,  as  against  Alfred    Blenkarn,  and 
therein  named  Alfred  Blenkarn  a.  the  debtor.     Blenkarn's  fraud  was 
ed,  and  he  was  prosecuted  at  the  Central  criminal  court, 
and  convicted  and  ed. 

M,  L,ind     .   then  broughl  an  action  against   Messrs.  Cundy  as 

for  unlawful  conver  ion  of  the  handkerchiefs.     The  cause  was  tried 
before    Mr.  Ju  tice    Blackburn,  who   left    it    to   the  jury  to  consider 
whether  Alfred  Blenkarn,  with  a  fraudulent  intent  to  induce  the  plain 
tiffs  to  give  him  the  credil  belong  ■  ood  character  of  Blenk- 

iron &  Co.,  wrote  the  letters,  and  by  fraud  induced  the  plaintiffs  to 

7  Wood  -trect —were  they  the  -anie  g 1     as  those 


140  FRAUD    AND    RETENTION    OF    POSSESSION 

bought  by  the  defendants — and  did  the  plaintiffs  by  the  affidavit  of 
debt  intend,  as  a  matter"  of  fact,  to  adopt  Alfred  Blenkarn  as  their 
debtor.  The  first  and  second  questions  were  answered  in  the  affirm- 
ative, and  the  third  in  the  negative.  A  verdict  was  taken  for  the 
defendants,  with  leave  reserved  to  move  to  enter  the  verdict  for  the 
plaintiffs.  On  motion  accordingly,  the  court,  after  argument,  ordered 
the  rule  for  entering  judgment  for  the  plaintiffs  to  be  discharged,  and 
directed  judgment  to  he  entered  for  the  defendants.  1  Q.  B.  Div.  348. 
On  appeal  this  decision  was  reversed,  and  judgment  ordered  to  be 
entered  for  the  plaintiffs,  Messrs.  Lindsay.  2  Q.  B.  Div.  96.  This 
appeal  was  then  brought. 

Cairns,  L.  Ch.  My  lords,  you  have  in  this  case  to  discharge  a. 
duty  which  is  always  a  disagreeable  one  for  any  court,  namely,  to 
determine  as  between  two  parties,  both  of  whom  are  perfectly  inno- 
cent, upon  which  of  the  two  the  consequences  of  a  fraud  practised 
upon  both  of  them  must  fall.  My  lords,  in  discharging  that  duty 
your  lordships  can  do  no  more  than  apply  rigorously  the  settled  and 
well-known  rules  of  law.  Now,  with  regard  to  the  title  to  personal 
property,  the  settled  and  well-known  rules  of  law  may,  I  take  it,  be- 
thus  expressed:  By  the  law  of  our  country  the  purchaser  of  a  chat- 
tel takes  the  chattel,  as  a  general  rule,  subject  to  what  may  turn  out 
to  be  certain  infirmities  in  the  title.  If  he  purchases  the  chattel  in 
market  overt,  he  obtains  a  title  which  is  good  against  all  the  world; 
but  if  he  does  not  purchase  the  chattel  in  market  overt,  and  if  it  turns 
out  that  the  chattel  has  been  found  by  the  person  who  professed  to 
sell  it,  the  purchaser  will  not  obtain  a  title  good  as  against  the  real 
owner.  If  it  turns  out  that  the  chattel  has  been  stolen  by  the  person 
who  has  professed  to  sell  it,  the  purchaser  will  not  obtain  a  title.  If 
it  turns  out  that  the  chattel  has  come  into  the  hands  of  the  person  who 
professed  to  sell  it,  by  a  de  facto  contract,  that  is  to  say,  a  contract 
which  has  purported  to  pass  the  property  to  him  from  the  owner  of 
the  property,  there  the  purchaser  will  obtain  a  good  title,  even  al- 
though afterwards  it  should  appear  that  there  were  circumstances 
connected  with  that  contract  which  would  enable  the  original  owner 
of  the  goods  to  reduce  it,  and  to  set  it  aside,  because  these  circum- 
sta'nees  so  enabling  the  original  owner  of  the  goods  or  of  the  .chattel 
to  reduce  the  contract  and  to  set  it  aside,  will  not  be  allowed  to  in- 
terfere with  a  title  for  valuable  consideration  obtained  by  some  third 
party  during  the  interval  while  the  contract  remained  unreduced. 

My  lords,  the  question,  therefore,  in  the  present  case,  as  your  lord- 
ships will  observe,  really  becomes  the  very  short  and  simple  one  which 
I  am  about  to  state.  Was  there  any  contract  which,  with  regard  to 
the  goods  in  question  in  this  case,  had  passed  the  property  in  the  goods 
from  the  Messrs.  Lindsay  to  Alfred  Blenkarn?  If  there  was  any  con- 
tract passing  that  property,  even  although,  as  I  have  said,  that  con- 
tract might  afterwards  be  open  to  a  process  of  reduction,  upon  the 


REMEDIES   OF   DEFRAUDED   PARTY  141 

ground  of  fraud,  still,  in  the  meantime,  Blenkarn  might  have  conveyed 
a  good  title  for  valuable  consideration  to  the  present  appellants. 

Now,  my  lords,  there  are  nvo  observations  bearing  upon  the  solu- 
tion of  that  question  which  I  desire  to  make.  In  the  hist  place,  if  the 
property  in  the  goods  in  question  passed,  it  could  only  pass  by  way  of 
contract.  There  is  nothing  else  which  could  have  passed  the  property. 
The  second  observation  is  this :  Your  lordships  are  not  here  embar- 
rassed  by  any  conflict  of  evidence,  or  any  evidence  whatever  as  to  con- 
versations or  as  to  acts  done;  the  whole  history  of  the  whole  trans- 
action lies  upon  paper.  The  principal  parties  concerned,  the  respond- 
ents and  Blenkarn,  never  came  in  contact  personally ;  everything  that 
was  done  was  done  by  writing.  What  has  to  be  judged  of,  and  what 
the  jury  in  the  present  case  had  to  judge  of  was  merely  the  conclu- 
sion to  be  derived  from  that  writing,  as  applied  to  the  admitted  facts 
of  the  case. 

Now,  my  lords,  discharging  that  duty  and  answering  that  inquiry, 
what  the  jurors  have  found  is,  in  substance,  this:  It  is  not  necessary 
to  spell  out  the  words,  because  the  substance  of  it  is  beyond  all  doubt. 
They  have  found  that  by  the  form  of  the  signatures  to  the  letters 
which  were  written  by  Blenkarn,  by  the  mode  in  which  his  letters  and 
his  applications  to  the  respondents  were  made  out,  and  by  the  way 
in  which  he  left  uncorrected  the  mode  and  form  in  which,  in  turn, 
he  was  addressed  by  the  respondents;  that  by  all  those  means  he  led, 
and  intended  to  lead,  the  respondents  to  believe,  and  they  did  believe, 
that  the  person  with  whom  they  were  communicating  was  not  Blenk- 
arn, the  dishonest  and  irresponsible  man,  but  was  a  well  known  and 
solvent  house  of  Blenkiron  &  Co.,  doing  business  in  the  same  street. 
My  lords,  those  things  are  found  as  matters  of  fact,  and  they  are 
placed  beyond  the  range  of  dispute  and  controversy  in  the  case. 

If  that  is  so,  what  is  the  consequence?  It  is  that  Blenkarn — the 
dishonest  man,  as  I  call  him — \^re  acting  here  just  in  the  same  way 

if  he  had  forged  the  signature  of  Blenkiron  &  Co.,  the  respectable 
firm,  to  the  applications  for  goods,  and  as  if  when,  in  return,  the 
goods  were  forwarded  and  letters  were  sent,  accompanying  them,  he 
had  intercepted  the  goods  and  intercepted  the  letters,  and  had  taken 
possession  of  the  goods,  and  of  the  letters  which  were  addressed  to 
and  intended  for,  not  himself,  but  the  firm  of  Blenkiron  &  Co.  Now, 
my  lords,  stating  the  matter  shortly  in  that  way.  I  ask  the  question, 
h<»w  is  it  possible  to  imagine  that  in  that  state  of  things  any  contt 
could  have  arisen  between  the  respondents  and    Blenkarn,  the  i 

honest    man?      Of    him    they   knew    nothing,   and    of    him    il 

thought.     With  him  they  never  intended  to  deal.    Their  minds  nc\ 
n  for  an  instant  of  time  re  ted  upon  him,  and  as  between  him  and 

them  there  was  no  o  of  mind  which  could  lead  tO  anv  agn 

nient  or  any  contract  whatever.     As  between  him  and  them  there  was 

merely  the  one    ide  to  a  contract,  where,  in  order  to  produce  a  o 
tract,  two  sides  would  be  required.     With  the  firm  ol   Blenkiron  & 


•  12  FRAUD    AND    RETENTION    OF    POSSESSION 

Co.  of  course  there  was  no  contract,  for  as  to  them  the  matter  was 
entirely  unknown,  and  therefore  the  pretence  of  a  contract  was  a 
failure.  • 

The  result,  therefore,  my  lords,  is  this :  that  your  lordships  have 
not  here  to  deal  with  one  of  those  cases  in  which  there  is  de  facto  a 
contract  made  which  may  afterwards  be  impeached  and  set  aside  on 
the  ground  of  fraud ;  but  you  have  to  deal  with  a  case  which  ranges 
itself  under  a  completely  different  chapter  of  law,  the  case,  namely, 
in  which  the  contract  never  comes  into  existence.  My  lords,  that  being 
so,  it  is  idle  to  talk  o*  the  property  passing.  The  property  remained, 
as  it  originally  had  been,  the  property  of  the  respondents,  and  the  title 
which  was  attempted  to  be  given  to  the  appellants  was  a  title  which 
could  not  be  given  to  them. 

My  lords,  I  therefore  move  your  lordships  that  this  appeal  be  dis- 
missed with  costs,  and  the  judgment  of  the  court  of  appeal  affirmed. 

Judgment  appealed  from  affirmed,  and  appeal  dismissed,  with  costs. 


III.  Fraud  on  Creditors  * 


MARTIN  v.  MARSHALL. 
(Supreme  Court  of  Kansas,  1S94.     54  Kan.  147,  37  Pac.  977.) 

In  December,  1888,  and  early  in  January,  1889,  Edward  Pelletier 
and  George  Pelletier  were  engaged  in  the  retail  grocery  business  in 
Concordia  under  the  firm  name  and  style  of  Pelletier  Bros.,  and  were 
largely  indebted  to  wholesale  and  jobbing  houses,  and  much  of  this 
indebtedness  was  past  due.  They  ^fcre  being  urged  by  their  creditors 
to  pay  the  demands  owing  by  them.  Neither  of  them  owned  any 
property  subject  to  execution,  other  than  this  stock  of  groceries. 
Early  in  January,  1889,  when  pressed  by  their  creditors,  Pelletier 
Bros,  made  various  promises  to  pay  money  on  their  demands,  but 
failed  to  do  so.  On  January  3,  1889,  they  made  a  pretended  sale  of 
all  their  stock  of  goods  to  John  Martin  and  Medore  Martin,  partners 
as  Medore  Martin  &  Co.,  receiving,  as  the  Pelletiers  and  Martins 
state,  $200  in  cash,  a  deed  to  some  property  in  Concordia,  which  was 
at  the  time  mortgaged,  and  a  note  for  $500,  then  in  litigation  in  the 
courts  of  Arkansas.  Attachments  were  levied  by  some  of  their  cred- 
itors upon  this  stock  of  goods,  and  judgments  were  obtained  against 
Pelletier  Bros.  The  goods  were  sold,  and  the  money  received  from 
the  sale  of  the  goods  applied  in  part  payment  of  the  judgments  and 
costs.  On  January  22,  1889,  this  action  was  brought  by  Medore  Mar- 
tin  &  Co.   against  the  sheriff,  Edward   Marshall,  to  recover  $5,000 

■*  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  58,  59. 


FRAUD   ON   CREDITORS  143 

damages.  The  case  was  tried  by  court  with  a  jury.  The  jury  re- 
turned a  verdict  for  the  defendant,  and  judgment  was  entered  there- 
on.    The  plaintiffs  bring  the  case  here. 

Hortox,  C.  J.  (after  stating  the  facts).  Martin  &  Co.  claim  that 
on  the  3d  day  of  January,  1889,  they  purchased  of  Pelletier  Bros.,  at 
Concordia,  a  stock  of  groceries,  fixtures,  etc.,  for  $2,500.  Edward 
Marshall,  as  sheriff  of  Cloud  county,  levied  on  the  property  under 
attachments  in  his  hands  from  creditors  of  the  Pelletier  Bros.  The 
question  tried  in  the  court  below  was  as  to  the  validity  of  the  sale 
claimed  to  have  been  made  by  Pelletier  Bros,  to  the  plaintiffs.  It  ap- 
pears that  on  the  afternoon  of  January  3,  1889,  there  was  a  pretended 
sale  of  the  property,  evidenced  by  an  agreement  in  writing  signed  by 
the  parties.  This  agreement  provided  that  the  Pelletier  Bros,  were 
to  accept  as  part  payment  for  the  stock  of  goods,  etc.,  the  south  half 
of  block  3  in  Gaylord  &  Matthews'  addition  in  the  city  of  Concordia, 
subject  to  a  mortgage  of  $800,  and  a  note  given  by  Preston  L,.  Wil- 
liams for  $400.  After  an  inventory  of  the  goods  had  been  taken  the 
balance  due  upon  the  inventory  was  to  be  paid  in  cash.  The  inventory 
was  completed  in  the  forenoon  of  January  4,  1889.  It  shows  that 
the  goods',  at  cost  price,  were  worth  about  $2,700.  The  Pelletiers 
agreed  to  take  $2,500.  The  lots  in  Concordia  were  to  be  taken  by 
them  at  the  value  of  $1,800,  subject  to  the  mortgage  of  $800,  and  the 
Williams  note,  with  interest,  as  $500.  The  balance  of  $200  was  paid 
in  cash. 

The  lots  in  Concordia  were  only  worth  $700  or  $800,— not  more 
than  the  mortgage.  The  note  of  $500  was  not  only  clouded  with  lit- 
igation, but  one  of  the  Pelletier  brothers  knew  that  the  maker  alleged 
in  his  defense  that  it  was  obtained  fraudulently.  The  Pelletiers,  at 
the  time  of  making  a  sale  of  the  stock,  were  heavily  indebted  to  their 

iitors,  who  were  pressing  them  for  payment,  and  the  evidence 
clearly  shows  that  the  sale  was  made  by  them  with  the  fraudulent  in- 
tent to  delay  and  defraud  their  creditors.  Thai  good  faith  is  essential 
to  support  the  sale  cannot  be  questioned.  If  .Martin  &  Co.  knew  of 
the   fraudulent  intent  of  the  Pelletiers,  and  bought  with  that  knowl- 

je,  they  cannol  claim  to  he  bona  fide  purchasers.  "Knowledge  of 
facts  sufficient  to  excite  the  suspicions  of  a  prudent  man.  and  put  him 
upon  inquiry,  is,  as  a  general  proposition,  equivalent  to  knowledge 
of  the  ultimate  fact."  Phillips  v.  Reitz,  16  Kan.  396;  Tridm.  Sales,  ^ 
329;    Schulein  v.  Hainer,  48  Kan.  2  1''.  2''  Pac.  171.    There  is  ample 

lence  in  the  record  tending  to  show  that  the  property  turned  over 

to  the  Pelletiers  by  Martin  &  Co.  as  pari  paymenl   for  the  stock  of 

'i.,!  worth  one-half  the  sum  for  which  it  was  accepted. 

rt in  &  ('".  did  not  allow  adequate  prices    For  tin-  property  pur 
chased,  and  in  view  of  all  the  evidence  the  jury  were  justified  in  find 

ing  that  they  did  not   ad    in  good   faith.     McDonald  v.  Gaunt,  3"  Kan. 

693,  2  Pac.  871;    Lewis  v.  Hughes,  49  Kan.  23,  .;'i  Pac.  177.    The 


144  FRAUD    AND    RETENTION    OF    POSSESSION 

trial  court  charged  the  jury  sufficiently  upon  all  the  material  proposi- 
tions of  law  involved  in  the  case. 

Various  objections  are  presented  in  the  briefs  concerning  the  re- 
ception and  rejection  of  evidence.  We  have  examined  all  of  these 
questions  carefully,  but  find  no  material  error  contained  therein.  The 
invoice  offered  was  competent  evidence,  and  ought  to  have  been  re- 
ceived, but  witnesses  were  permitted  to  describe  the  goods  referred 
to,  and  to  state  the  amount  of  the  invoice.  Further,  it  appears  that 
the  Pelletier  Bros,  finally  agreed  to  sell  the  stock  in  bulk  for  $2,500. 
The  invoice,  therefore,  was  not  important.  It  is  not  necessary  to 
comment  upon  the  other  matters  referred  to  in  the  briefs.  The  judg- 
ment of  the  district  court  will  be  affirmed.  All  the  justices  concur- 
ring. 


IV.  How  far  Delivery  is  Essential  to  Transfer  Property  Against 

Creditors  and  Purchasers  6 


KIRVEN  v.  PINCKNEY. 
(Supreme  Court  of  South  Carolina,  1S9G.    47  S.  C.  229,  25  S.  E.  202.) 

Action  by  James  N.  Kirven  against  Henry  L.  Pinckney  and  another 
to  recover  a  certain  mare.  There  was  a  judgment  for  plaintiff  and 
defendants  appeal. 

Pope,  J.6  *  *  *  It  seems  that  the  plaintiff  made  an  agree- 
ment with  one  Mr.  Henry  Tupper,  of  Charleston,  in  this  state,  which 
was  formally  embodied  in  this  written  agreement,  to  wit:  "October 
2d,  1894.  This  is  to  certify  that  J.  N.  Kirven  and  Henry  Tupper 
have  traded  the  following  mares,  Brown  Girl  and  Daisy,  J.  N.  Kirven 
to  give  H.  Tupper  Brown  Girl  and  $25.00  for  Daisy.  J.  N.  Kirven 
to  pay  freight  on  both  mares.  H.  Tupper  to  raise  the  colt  that  Brown 
Girl  is  with,  to  the  age  of  six  months,  and  then  give  said  colt  to  J.  N. 
Kirven;  and,  if  the  colt  is  not  sound  at  that  time,  H.  Tupper  is  to 
pay  J.  N.  Kirven  $100.00.  Brown  Girl  is  by  Highland  Red  out  of 
Worth  by  Black  Chief.  Brown  Girl  is  in  foal  by  Melville  Chief 
(2353),  due  to  foal  on  or  about  7th  March,  1895.  In  witness  where- 
of, I  have  hereunto  set  my  hand  and  seal,  this  4th  day  of  Sept.,  1894. 
Henry  Tupper  [L.  S.]" 

On  the  8th  day  of  October,  1894,  this  plaintiff  shipped,  by  rail, 
Brown  Girl  to  the  order  of  Henry  Tupper,  and  advised  Tupper  to 
send  to  him  Daisy  on  the  night  of  the  same  day.  A  letter  from  Tup- 
per to  Kirven,  dated  8th  October,  1894,  admits  the  receipt  from  Kir- 
ven of  a  telegram  to  this  effect  on  that  same  day,  and  expresses  his 
regret  at  not  being  able  to  ship  Daisy  on  that  night,  explaining  his 

5  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  60. 

6  Part  of  the  opinion  is  omitted. 


DELIVERY  ESSENTIAL  AGAINST  CREDITORS  AND  PURCHASERS        145 

inability  by  reason  of  the  mare  being  up  town,  but  stating  she  should 
be  shipped  the  next  day.  On  the  9th  day  of  October,  1894,  when 
Tupper  sent  to  the  railroad  authorities  for  the  mare  Brown  Girl,  his 
messenger  returned  with  the  information  that  she  was  sick.  There- 
upon he  employed  a  veterinary  surgeon  (one  Mclnness)  to  do  what 
he  could  for  her,  but  she  died  while  in  the  car  at  Charleston.  Mr. 
Tupper  promptly  notified  Mr.  Kirven  of  his  loss,  and  advised  Kirven 
to  bring  suit  against  the  railroad  for  damages.  Mr.  Kirven,  how- 
ever, sent  him  a  check  for  the  S25,  dated  8th  October,  1894,  and  in- 
sisted that  Brown  Girl  was  Mr.  Tupper's  loss.  Mr.  Tupper,  however, 
denied  this,  and  returned  the  check  to  Mr.  Kirven. 

This  describes  the  attitude  of  the  parties  to  each  other.  Mr.  Tup- 
per sold  the  mare  Daisy  to  the  defendant  Henry  L.  Pinckney,  Jr. ; 
and  Mr.  Pinckney  placed  her  in  the  keeping  of  the  defendant  Manly 
Boykin.  The  two  last  reside  in  Sumter  county,  where  the  mare  Daisy 
is  kept,  who,  by  the  way,  has  dropped  a  colt ;  so  that  now  Mr.  Kirven 
brings  his  suit  for  claim  and  delivery  against  Mr.  Pinckney  and  Mr. 
Boykin  for  both  the  mare  Daisy  and  her  colt,  but  Mr.  Tupper  is  not 
made  a  party  to  this  suit. 

One  of  the  defenses  set  up  by  the  defendant  is  that  Daisy  never 
became  the  property  of  Mr.  Kirven;  that  the  agreement  between  Mr. 
Kirven  and  Mr.  Tupper  was  only  for  an  exchange  of  mares,  but  was 
never  executed ;  and  that  the  only  remedy  Mr.  Kirven  had  was  to  sue 
Tupper  for  a  breach  of  his  contract ;  and  that  Kirven  never  owned 
or  had  a  lien  on  the  mare  Daisy,  and  therefore  the  defendant  Pinck- 
ney had  a  perfect  right  to  buy  her  as  he  did.  We  cannot  regard  this 
as  a  sale  of  the  mare  Daisy  to  Mr.  Kirven.  The  contract  shows  that 
it  was  to  be  an  exchange  of  one  mare  for  the  other,  with  $25  as 
"boot."  This  exchange  was  never  consummated.  If  the  contract  was 
breached  by  Tupper,  Kirven  had  his  remedy  by  bringing  his  action 
inst  Tupper  for  such  breach  of  his  contract.  We  cannot  view 
this  contract  as  executed  by  its  terms,  so  that  Brown  Girl  was  Tup- 
per's property,  and  Daisy  was  the  property  of  Kirven.  Each  had  to 
deliver  his  mare  to  the  other,  respectively,  before  the  rights  of  third 
parties  could  he  affected.  Whatever  remed)  Mr.  Kirven  has  is  against 
Mr.  Tupper.  The  defendant,  by  his  second  request  to  charge,  made 
this  point;  and  the  circuit  judge  refused  to  so  charge.  This  was 
>r.     The  <]  nt,  on  the  same  ground,  sought  a  nonsuit.     This 

was  refused  by  the  circuit  judge,  and  thereby  the  circuit  judge   was 
in  in  error. 

We  must  therefore  reverse  the  judgment,  and  direct  that  the  com- 
plaint he  dismissed.     It  is  the  judgment  of  this  court  that  the  judg- 
ment of  the  circuit  n,ur\  he  reversed,  and  the  cause  he  remitted  to  the 
circuit  court,  with  directions  to  that  court  to  dismiss  the  complaint. 
Cooley  Cases  Sat.es — 10 


146  FRAUD    AND    RETENTION    OF    FOSSESSION 

PARRY  v.  LIBBEY. 
(Supreme  Judicial  Court  of  Massachusetts,  189G.    1G6  Mass.  112,  44  N.  E.  121.) 

Action  by  Parry  Bros.  &  Glidden  against  Fred  C.  Libbey.  There 
was  a  rinding  for  plaintiffs,  and  defendant  brings  exceptions.  ■ 

It  appeared  that,  after  the  alleged  sale  of  the  bricks  in  suit  to  plain- 
tiffs, Sawyer  Bros.,  the  vendors,  went  into  insolvency.  Their  assignee 
produced  the  purchase-money  note  given  by  plaintiffs,  and  testified  that 
he  expected  to  realize  on  it  as  soon  as  the  litigation  was  settled. 

Holmes,  J.  This  is  an  action  for  the  conversion  of  certain  bricks, 
and  comes  before  us  on  the  defendant's  exceptions.  The  alleged 
conversion  was  a  seizure  of  the  bricks  under  a  mortgage  purport- 
ing to  cover  bricks  manufactured  subsequently  to  its  date,  and  the 
plaintiffs  claimed  title  by  delivery  to  them  as  bona  fide  purchasers  for 
value  under  a  bill  of  sale  before  the  seizure  by  the  defendant.  The 
bricks  in  question  were  made  after  the  mortgage.  The  main  questions 
raised  by  the  exceptions  are  whether  the  judge  ought  to  have  ruled 
that  there  was  no  delivery  of  the  bricks  to  the  plaintiffs,  and  also  that 
no  consideration  was  given  by  them  for  the  bill  of  sale. 

The  bill  of  sale  was  an  instrument  under  seal,  and  purported  to  con- 
vey to  the  plaintiffs  "a  certain  lot  of  bricks,  being  bricks  now  left  in  a 
certain  kiln  situated  in  the  southerly  end  of  brickshed  at  South  Clin- 
ton, Massachusetts,  containing  about  two  hundred  thousand  hard 
bricks,  also  about  one  hundred  thousand  light  hard  bricks;  being 
piled  partly  in  northern  end  of  said  shed,  and  partly  outside  of  shed." 
These  words,  on  their  face,  purport  to  convey  all  the  bricks  in  the  two 
distinct  piles  mentioned,  and,  there  being  no  denial  that  the  piles  were 
distinct,  parol  evidence  wras  not  admissible  to  cut  down  their  effect. 
Harper  v.  Ross,  10  Allen,  332.  Testimony  was  admitted  that  it  was 
agreed  orally  at  the  time  of  the  sale  that  the  vendor  should  have  the 
right  to  deliver,  out  of  the  bricks,  a  certain  amount, — it  seems,  about 
10,000  or  15,000  bricks, — that  he  wished  to  deliver  to  others.  But, 
apart  from  the  objection  just  stated,  the  judge  who  tried  the  case  was 
warranted  in  finding  that  this  amounted  to  no  more  than  a  license  to 
the  vendor  to  take  a  certain  amount  from  the  purchaser's  piles  in  case 
he  should  wish  to  do  so  thereafter. 

The  goods  sold  thus  being  specified,  the  parties  went  to  the  brick- 
yard, and  Mr.  Parry  says,  in  terms,  that  he  took  possession  of  them. 
He  counted  the  bricks,  and  made  arrangements  with  one  of  the  ven- 
dors, personally,  to  ship  the  bricks  as  he  should  send  word.  Portions 
of  the  bricks  were  shipped  from  time  to  time,  in  pursuance  of  the  ar- 
rangement. The  land  where  the  bricks  stood  seems  to  have  belonged 
to  a  third  person,  but  nothing  appears  in  the  evidence  which  diminishes 
the  effect  of  the  facts  stated.  On  these  facts  the  judge  was  war- 
ranted in  finding  a  delivery  sufficient  to  pass  the  title  to  all  the  bricks, 
as  against  third  persons.     Hobbs  v.  Carr,   127  Mass.  532;    Ropes  v. 


DELIVERY  ESSENTIAL  AGAINST  CREDITORS  AND  PURCHASERS         11" 

Lane,  9  Allen,  502,  510;  Id.,  11  Allen,  591;  Hardy  v.  Potter,  10  Gray, 
89;   Riddle  v.  Yarnum,  20  Pick.  280. 

A  question  of  evidence  may  be  disposed  of  before  passing  from 
this  subject.  The  defendant  offered  to  prove  that  the  sellers  of  the 
bricks,  after  the  delivery  to  the  plaintiffs,  spoke  of  the  bricks  as  theirs, 
solicited  orders  for  them,  and  delivered  what  they  sold.  The  judge 
excluded  evidence  of  such  words  or  acts,  so  far  as  they  were  not 
brought  home  to  the  knowledge  of  the  plaintiffs.  The  argument  for 
the  defendant  assumes  that  the  vendors  were  left  in  possession.  If 
they  were  not,  the  evidence  was  incompetent.  Horrigan  v.  Wright,  4 
Allen,  514;  Roberts  v.  Medbery,  132  Mass.  100.  Whether  the  ven- 
dors were  in  possession,  or  not,  constituted,  for  this  purpose,  one  of 
those  preliminary  matters  of  fact  which  are  to  be  found  by  the  judge 
who  tried  the  case,  and  on  which  his  adverse  finding  is  conclusive. 
Com.  v.  Bishop,  165  Mass.  148,  152,  42  N.  E.  560;  Com.  v.  Brewer, 
164  Mass.  577,  42  X.  E.  92. 

A  note  for  $1,000  was  given  by  the  plaintiffs  in  payment  for  the 
bricks,  on  which  $300  were  paid  by  the  plaintiffs  after  the  seizure  by 
the  defendant,  and  which  now  is  in  the  hands  of  the  assignee.  The 
money  actually  paid  is  part  of  the  entire  price.  We  do  not  perceive  on 
what  ground  we  should  deny  the  plaintiffs'  right  to  be  considered  pur- 
chasers for  value.  We  are  not  called  on  to  consider  how  the  case 
would  have  stood  had  the  assignee  undertaken  to  avoid  the  sale  as  a 
fraud  on  creditors.  The  assignee  holds  the  note,  and  seemingly  affirms 
the  sale.  The  right  set  up  by  the  defendant  was  not  a  right  to  avoid 
the  sale  as  a  fraud  on  creditors,  but  a  right  to  take  possession  under 
his  mortgage.  That  right  was  ended  as  soon  as  the  delivery  was  made 
to  Parry.  As  against  the  mortgagee  the  note  was  a  valuable  considera- 
tion. 

The  other  exceptions  are  not  argued.    Exceptions  overruled. 


14:8  ILLEGALITY 


ILLEGALITY 

I.  Sales  Prohibited  by  Common  Law  * 


MATERNE  v.  HORWITZ. 

(Court  of  Appeals  of  New  York,  1SS6.     101  N.  Y.  469,  5  N.  E.  331.) 

Action  to  recover  damages  for  breach  of  contract  to  accept  and  re- 
ceive 400  cases  of  domestic  sardines  with  "fancy  labels"  similar  to  im- 
ported goods.  From  a  judgment  of  the  general  term  of  the  superior 
court  of  the  city  of  New  York  (50  N.  Y.  Super.  Ct.  41),  affirming  a 
judgment  dismissing  the  complaint,  the  plaintiff  appeals. 

Peu  Curiam.  It  must  be  assumed,  we  think,  that  the  defendants 
knew,  when  the  agreement  was  made,  that  they  intended  to  purchase 
sardines  of  the  kind  that  were  tendered  to  them,  and  that  the  plain- 
tiffs understood  that  the  defendants  knew  it.  It  is  also  inferable  that 
the  defendants  entered  into  the  agreement,  to  the  knowledge  of  the 
plaintiffs,  for  the  purpose  of  selling  the  goods  to  others  in  the  condi- 
tion in  which  they  were  when  delivered.  It  is  also  evident  that  the 
labels  were  used  to  deceive  the  consumers,  and  not  the  contractors, 
and  to  obtain  higher  prices  for  the  sardines.  The  plaintiffs  procured 
and  furnished  the  deceptive  labels  after  binding  themselves  by  con- 
tract to  do  so,  and  this  was  done  for  an  unlawful  purpose,  with  a  view 
of  furnishing  goods  for  the  market  in  a  condition  calculated  to  deceive 
the  consumers  who  might  purchase  them.  It  is  therefore  apparent  that 
it  was  part  of  the  contract  that  an  unlawful  object  was  intended  to 
which  both  parties  were  cognizant,  and  that  it  was  designed  by  them, 
under  the  contract  to  commit  a  fraud,  and  thus  promote  an  illegal  pur- 
pose by  deceiving  other  parties.  In  such  a  case  the  courts  will  not  aid 
either  party  in  carrying  out  a  fraudulent  purpose. 

Under  the  Penal  Code,  §  438,  it  is  made  a  misdemeanor  to  sell  or 
offer  for  sale  any  package  falsely  marked,  labeled,  etc.,  as  to  the  place 
where  the  goods  were  manufactured,  or  the  quality  or  grade,  etc.  The 
contract  in  question  would  seem  to  be  covered  by  this  provision  of  the 
Code;  but  as  the  Penal  Code  did  not  go  into  effect  till  May  1,  1882, 
and  this  contract  was  made  June  30,  1881,  the  section  cited  has,  we 
think,  no  bearing  on  the  question  presented.  To  carry  out  this  con- 
tract would  be  contrary  to  public  policy,  and  in  such  a  case,  as  we 
have  seen,  the  court  will  not  aid  either  party. 

i  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  63,  64. 


SALES   PROHIBITED   BY   COMMON   LAW  149 

The  case  was  properly  disposed  of  upon  the  ground  first  stated, 
which  is  fully  considered  and  elaborated,  in  the  opinion  of  general 
term,  by  Sedgwick,  J.,  in  which  we  concur.  Judgment  should  be  af- 
firmed. 


GRAVES  v.  JOHNSON. 

(Supreme  Judicial  Court  of  Massachusetts,  1S92.    156  Mass.  211,  30  N.  E.  818, 
15  L.  R.  A.  8:J4,  32  Am.  St.  Rep.  446.) 

Action  by  Chester  H.  Graves  and  others  against  Walter  B.  John- 
son for  the  price  of  liquors  sold  to  defendant  by  plaintiffs.  Judgment 
for  plaintiffs,  and  defendant  excepts. 

Holmes,  J.  This  is  an  action  for  the  price  of  intoxicating  liquors. 
It  is  found  that  they  were  sold  and  delivered  in  Massachusetts  by  the 
plaintiffs  to  the  defendant,  a  Maine  hotel  keeper,  with  a  view  to  their 
being  resold  by  the  defendant  in  Maine  against  the  laws  of  that  state. 
These  are  all  the  material  facts  reported,  but  these  findings  we  must 
assume  were  warranted,  as  the  evidence  is  not  reported,  so  that  no 
question  of  the  power  of  Maine  to  prohibit  the  sales  is  open.  The 
only  question  is  whether  the  facts  as  stated  show  a  bar  to  this  action. 

The  question  is  to  be  decided  on  principles  which  we  presume  would 
prevail  generally  in  the  administration  of  the   common   law   in  this 
country.     Not  only  should  it  be  decided  in  the  same  way  in  which  wc 
should  expect  a  Maine  court  to  decide  upon  a  Maine  contract  pre- 
senting a  similar  question,  but  it  should  be  decided  as  we  think  that 
a  Maine  court  ought  to  decide  this  very  case  if  the  action  were  bro; 
there.     It  is  noticeable,  and  it  has  been  observed  by  Mr.  Pollock,  that 
some  of  the  English  cases  which  have  gone  furthest  in  asserting  the 
ht  to  disregard  the  revenue  laws  of  a  country  other  than  that  where 
contract  is  made  and  is  to  be  performed,  have  had  reference  to  the 
■lish  revenue  laws.    Holman  v.  Johnson,  1  Cowp.  341 ;   Poll.  Cont. 
(5th  Ed.)  308.    See,  also,  Mclntyre  v.  Parks,  3  Mete.  (Mass.)  20,. 

The  assertion  of  that  right,  however,  no  doubt  was  in  the  inten 
of  English  commerce,  (Pellecat  v.  Angell,  2  Cromp.  M.  &  R.  311,  313,) 
an<.  !  criticism,  (Story,  Confl.  Law  !54,  2?7,  note; 

3  Kent,  Comm.  265,  266;   Whart.  Confl.  Laws.  §  484),  although  there 
may  be  a  question  how  far  the  actual  decisions  go  beyond  what  would 

held  in  the  case  of  an  English  contrad  affecting  only  I 
lish  laws  (see  Hi  v.  Tern]  le,  5  Taunt.  181  ;    Brown  v.  Dum 

Harris  v.  Runnels,  12  Mow.  79,  83,  84,  13 

L.  Ed 

(  if  ,  ,;•.-.  it  would  b<  ble  for  an  independent  state  to  enforce 

all  contracts  made  and  to  L    performed  within  it  withoul   regard  to 

•  much  they  might  contravene  the  policy  of  >!     neighbors'  laws. 

But  in   fad  no    tate  pur  ich  a  course  of  barbarous  isolation. 

As  a  general  proposition,  it  is  admitted  that  an  agreement  to  bi 


1<~0  ILLEGALITY 

the  laws  of  a  foreign  country  would  be  invalid.  Poll.  Cont.  (5th  Ed.) 
308.  The  courts  are  agreed  on  the  invalidity  of  a  sale  when  the  con- 
tract contemplates  a  design  on  the  part  of  the  purchaser  to  resell  con- 
trary to  the  laws  of  a  neighboring  state,  and  requires  an  act  on  the 
part  of  the  seller  in  furtherance  of  the  scheme.  Waymell  v.  Reed, 
5  Term  R.  599;  Gay  lord  v.  Soragen,  32  Vt.  110,  76  Am.  Dec.  154; 
Fisher  v.  Lord,  63  N.  H.  514,  3  Atl.  927;  Hull  v.  Ruggles,  56  N.  Y. 
424,  429. 

On  the  other  hand,  plainly  it  would  not  be  enough  to  prevent  a  re- 
covery of  the  price  that  the  seller  had  reason  to  believe  that  the  buyer 
intended  to  resell  the  goods  in  violation  of  law.  He  must  have  known 
the  intention  in  fact.  Finch  v.  Mansfield,  97  Mass.  89,  92 ;  Adams 
v.  Coulliard,  102  Mass.  167,  173.  As  in  the  case  of  torts,  a  man  has 
a  right  to  expect  lawful  conduct  from  others.  In  order  to  charge  him 
with  the  consequences  of  the  act  of  an  intervening  wrongdoer,  you 
must  show  that  he  actually  contemplated  the  act.  Hayes  v.  Hyde 
Park,  153  Mass.  514-516,  27  N.  E.  522,  12  L,  R.  A.  249. 

Between  these  two  extremes  a  line  is  to  be  drawn.  But  as  the  point 
where  it  should  fall  is  to  be  determined  by  the  intimacy  of  the  con- 
nection between  the  bargain  and  the  breach  of  the  law  in  the  particular 
case,  the  bargain  having  no  general  and  necessary  tendency  to  induce 
such  a  breach,  it  is  not  surprising  that  courts  should  have  drawn  the 
line  in  slightly  different  places.  It  has  been  thought  not  enough  to 
invalidate  a  sale  that  the  seller  merely  knows  that  the  buyer  intends 
to  resell  in  violation  even  of  the  domestic  law.  Tracy  v.  Talmage,  14 
N.  Y.  162,  67  Am.  Dec.  132;  Hodgson  v.  Temple,  5  Taunt.  181.  So 
of  the  law  of  another  state.  Mclntyre  v.  Parks,  3  Mete.  (Mass.)  207 ; 
Sortwell  v.  Hughes,  1  Curt.  244,  Fed.  Cas.  No.  13,177;  Green  v.  Col- 
lins, 3  Cliff.  494,  Fed.  Cas.  No.  5,755 ;  Hill  v.  Spear,  50  N.  H.  253, 
9  Am.  Rep.  205.  Dater  v.  Earl,  3  Gray,  482,  is  a  decision  on  New 
York  law. 

But  there  are  strong  intimations  in  the  later  Massachusetts  cases 
that  the  law  on  the  last  point  is  the  other  way,  (Suit  v.  Woodhall. 
113  Mass.  391,  395;  Finch  v.  Mansfield,  97  Mass.  89,  92;)  and  the 
English  decisions  have  gone  great  lengths  in  the  case  of  knowledge 
of  intent  to  break  the  domestic  law,  (Pearce  v.  Brooks,  L.  R.  1  Exch. 
213;  Taylor  v.  Chester,  L.  R.  4  O.  B.  309,  311.) 

However  this  may  be,  it  is  decided  that  when  a  sale  of  intoxicating 
liquor  in  another  state  has  just  so  much  greater  proximity  to  a  breach 
of  the  Massachusetts  law  as  is  implied  in  the  statement  that  it  was 
made  with  a  view  to  such  a  breach,  it  is  void.  Webster  v.  Mlunger, 
8  Gray,  584 ;  Orcutt  v.  Nelson,  1  Gray,  536,  541 ;  Hubbell  v.  Flint, 
13  Gray,  277,  279;  Adams  v.  Coulliard,  102  Mass.  167,  172,  173. 
Even  in  Green  v.  Collins  and  Hill  v.  Spear,  the  decision  in  Webster 
v.  Munger  seems  to  be  approved.  See,  also,  Langton  v.  Hughes,  1 
Maule  &  S.  593 ;  M'Kinnell  v.  Robinson,  3  Mees.  &  W.  434,  441  ; 
White  v.  Buss.  3  Cush.  448.     If  the  sale  would  not  have  been  made 


SALES   PHOHIBITED   BY   COMMON    LAW  153 

but  for  the  seller's  desire  to  induce  an  unlawful  sale  in  Maine,  it  would 
be  an  unlawful  sale,  on  the  principles  explained  in  Hayes  v.  Hyde 
Park.  153  Mass.  514,  27  X.  E.  522,  12  L.  R.  A.  249,  and  Tasker- v. 
Stanley,  153  Mass.  143,  26  X.  E.  417.  10  L.  R.  A.  468.  The  overt 
act  of  selling,  which  otherwise  would  be  too  remote  from  the  appre- 
hended result, — an  unlawful  sale  by  some  one  else, — would  be  con- 
nected with  it,  and  taken  out  of  the  protection  of  the  law  by  the  fact 
that  that  result  was  actually  intended. 

We  do  not  understand  the  judge  to  have  gone  so  far  as  we  have 
just  supposed.  We  assume  that  the  sale  would  have  taken  place  what- 
ever the  buyer  had  been  expected  to  do  with  the  goods.  But  we  un- 
derstand the  judge  to  have  found  that  the  seller  expected  and  de- 
sired the  buyer  to  sell  unlawfully  in  Maine,  and  intended  to  facilitate 
his  doing  so,  and  that  he  was  known  by  the  buyer  to  have  that  intent. 
The  question  is  whether  the  sale  is  saved  by  the  fact  that  the  intent 
mentioned  was  not  the  controlling  inducement  to  it.  As  the  connec- 
tion between  the  act  in  question,  the  sale  here,  and  the  illegal  result, 
the  sale  in  Maine, — its  tendency  to  produce  it, — is  only  through  the 
later  action  of  another  man,  the  degree  of  connection  or  tendency  may 
vary  by  delicate  shades.  If  the  buyer  knows  that  the  sale  is  made  only 
for  the  purpose  of  facilitating  his  illegal  conduct,  the  connection  is  at 
the  strongest.  If  the  sale  is  made  with  the  desire  to  help  him  to  his 
end,  although  primarily  made  for  money,  the  seller  cannot  complain 
if  the  illegal  consequence  is  attributed  to  him.  If  the  buyer  knows 
that  the  seller,  while  aware  of  his  intent,  is  indifferent  to  it  or  disap- 
proves of  it,  it  may  be  doubtful  whether  the  connection  is  sufficient. 
Compare  Com.  v.  Churchill,  136  Mass.  148,  150.  It  appears  to  us  not 
unreasonable  to  draw  the  line  as  it  was  drawn  in  Webster  v.  Munger, 
and  to  say  that  when  the  illegal  intent  of  the  buyer  is  not  only  known 
to  the  seller,  but  encouraged  by  the  sale  as  just  explained,  the  sale  is 
void.  The  accomplice  is  none  the  less  an  accomplice  that  he  is  paid 
for  his  act.    See  Com.  v.  Harrington,  3  Pick.  26. 

'Die  ground  of  the  decision  in  Webster  v.  Munger  is  that  contracts 
like  the  present  are  void.  If  the  contract  had  been  valid,  it  would 
have  been  enforced.  Dater  v.  Earl,  3  Gray,  482.  As  we  have  -aid 
or  implied  already,  no  distinction  can  be  admitted  based  on  the  fact 
that  the  law  to  he  violated  in  that  case  was  the  lex  fori.  For  if  such 
a  distinction  is  ever  sound,  and  again  if  the  same  principles  are  not 

always  tO  hi-  applied  whether  the  law  to  he  violated  is  that  of  the  state 

of  the  contracl  or  of  another  (see  Tracy  v.  Talmage,  11   X.  Y.   162, 

213,  67  Am.   Dee.   132)  at   least    the  righl    1"  contract   with  a  view   to  a 

breach  of  tin-  laws  ,,i  another  state  of  this  Union  oughl  not  to  be 

ized  as  againsl  a  statute  passed  to  carry  out  fundamental 
about   righl   ami  wrong  shared  by  a  large  pari  of  our  own  citiz 
(Territtv.  Bartlett,  21  \'t.  184,  188,189.)    [n  the  opinion  of  a  majority 
..f  the  court,  this  ca  e  is  governed  by  Web  ter  v.  Munger,  and  we  he 


152  ILLEGALITY 

lieve  that  it  would  have  been  decided  as  we  decide  it  if  the  action  had 
been  brought  in  Maine  instead  of  here.  Banchor  v.  Mansel,  47  Me.  58. 
Exceptions  sustained. 


II.  Sales  Prohibited  by  Statute 


KEIXEY  v.  COSGROVE. 

(Supreme  Court  of  Iowa,  1S91.     S3  Iowa,  229,  4S  N.  W.  979,  17  L.  It.  A.  779.) 

Action  of  replevin  for  a  horse.  The  petition  shows  that  the  plain- 
tiffs were  the  owners  of  the  horse  in  question,  and  that  on  Sunday, 
the  11th  day  of  August,  1889,  they  traded  or  exchanged  said  horse 
with  defendant  for  a  certain  mare,  the  exchange  of  possession  being 
made  on  that  day ;  that  on  the  next  day  Thomas  Kelley,  as  the  agent 
of  the  plaintiffs,  tendered  back  the  mare,  and  demanded  a  return  of 
the  horse,  for  the  reason  that  the  exchange  or  trade  was  made  on 
Sunday,  and  therefore  void,  which  the  defendant  refused;  and  that 
the  exchange  of  horses  was  not  a  work  of  charity  or  necessity.  The 
answer  of  the  defendant  admits  that  he  went  to  the  defendant's  place 
of  business  on  Sunday,  and  then  and  there  made  the  exchange  of 
horses  referred  to  in  plaintiff's  petition,  and  that  said  exchange  was 
complete  in  every  respect  and  particular,  plaintiffs  taking  the  mare 
referred  to  in  the  petition,  and  defendant  taking  the  horse  therein  re- 
ferred to ;  that  said  exchange  was  completed  in  all  respects  on  the 
day  and  date  above  mentioned.  Defendant  also  admits  "that  the  said 
trade  and  transaction  was  not  an  act  or  work  of  charity  or  necessity," 
and  that  a  re-exchange  of  horses  was  demanded  and  refused.  Upon 
this  state  of  the  proceedings  as  to  the  issue  presented  the  plaintiffs 
moved  the  court  for  judgment  in  their  favor  for  the  possession  of  the 
horse  and  for  costs  on  the  ground  that  the  exchange  of  horses  was  a 
Sunday  contract,  and  plaintiffs  had  tendered  back  the  mare,  and  de- 
manded a  return  of  the  horse,  which  was  refused.  The  court  over- 
ruled the  motion  and  the  plaintiffs  elected  to  stand  therein.  The  plain- 
tiffs appealed. 

Granger,  J.3  1.  These  parties  met  and  exchanged  horses  on 
Sunday.  The  transaction  was  unlawful.  The  record  does  not  dis- 
close that  either  party  suffered  a  loss  in  the  transaction.  It  was  an 
exchange  of  a  horse  for  a  horse,  and  there  is  no  averment  or  claim 
that  they  are  not  of  equal  value.  The  parties  were  alike  in  the  wrong, 
and  the  law  makes  the  same  presumptions  for  and  against  each.  If 
this  exchange  had  been  made  on  a  secular  day,  there  could  be  no  pre- 
tense of  the  plaintiffs'  right  of  recovery.     The  question  is  therefore 

a  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  G5. 

3  Tin-  statement  of  facts  is  abridged  and  part  of  the  opinion  omitted. 


SALES   PROHIBITED   BY   STATUTE  153 

one  of  a  naked  legal  right,  not  to  relief  from  the  consequences  of  a 
violated  law,  but  to  invoke  the  aid  of  a  violated  law  to  relieve  them 
from  what  would  otherwise  be  legal.  It  is  well  settled  that  the  law 
will  not  aid  the  parties  to  enforce  a  contract  made  on  Sunday.  Thus 
if  A.  sells  his  horse  to  B.  on  Sunday  on  a  credit  the  law  will  not  aid 
him  to  enforce  a  payment.  It  will  sooner  permit  him  to  suffer  the  loss. 
Much  less  will  it,  if  he  sells  his  horse  on  Sunday,  and  receives  in 
money  the  full  value  thereof,  assist  him  on  Monday  to  return  the 
money  and  regain  his  horse.  This  supposed  case  as  against  appel- 
lants is  not  stronger  than  the  one  at  bar.  It  is  not  important  that  we 
should  discuss  cases  in  which  one  party  has  a  superior  advantage,  and 
is  seeking  to  take  the  property  of  another  without  compensation,  or 
to  make  rich  gains  by  means  of  the  Sunday  law.  Without  now  com- 
mitting ourselves  to  any  theory  in  such  cases,  it  is  easy  to  imagine  con- 
ditions and  wrongs  for  which  it  would  be  difficult  to  believe  the  legis- 
lature ever  designed  the  law  as  a  shield.  But  it  is  not  difficult  to  be- 
lieve that  the  legislature  never  intended  that  the  law  against  Sabbath- 
breaking  should  be  a  means  of  enabling  parties,  because  its  offenders, 
to  escape  that  which  but  for  the  offense  would  be  legal  and  just. 

Appellants  have  made  an  extended  collection  of  authorities  bearing 
on  the  enforcement  and  application  of  Sunday  laws  to  different  facts, 
but  no  case  is  brought  to  our  attention  that  in  its  facts  is  like  this. 
Appellants  criticise  the  holding  in  Gunderson  v.  Richardson,  56  Iowa. 
56,  8  X.  W.  683,  41  Am.  Rep.  81,  and  intimate  that  it  should  be  over- 
ruled if  it  militates  against  their  position  in  this  case.  It  was  held  in 
that  case  that  there  could  be  no  recovery  for  fraudulent  representa- 
tions marie  as  an  inducement  to  enter  into  a  contract  on  Sunday.  It 
is  true  that  the  holding  and  reasoning  in  that  case  is  inconsistent  with 
appellants'  position  in  this;  but  it  does  not  follow  that  an  adv< 
holding  in  that  case  would  support  appellants'  view  in  this.  In  that 
case  the  defendant  pleads  the  violation  of  the  Sunday  law  as  a 
fense  or  shield  against  a  charge  of  fraud,  and  this  court  sustained  the 
:  upon  the  authority  of  Pike  v.  King,  16  Iowa,  49,  and  Kinney 
v.  McDermott,  55  towa,  674,  8  N.  W.  656,  39  Am.  Rep.  I'M  ;  citing 
nith  v.  I  lean.  15  X.  11.  577.  The  abstract  contains  a  paren 
thetical  statement  that  the  petition  originally  contained  allegations  of 
warranty  and  false  representations,  "which  allegations  were  stricken 
and  withdrawn  by  plaintiff."  showing  an  intent  to  divesl  the  record 
of  such  a  claim.  This  case  rests,  then,  upon  this  proposition:  I  I  a 
party,  in  violation  of  the  law.  parts  with  his  property  on  Sunday,  will 
the  lav.  for  i  on  alone  aid  him  to  regain  it:j    Without  hesita- 

tion we  answer,  "No." 

The  lat«-  case  of  Foster  v.  Wooten,  67  Mi<s.  540,  7  South.  501, 
while  it  sustains  our  answer  to  the  quel    ,  i    of  much  broader  signif 
icance,  and  we  cite  it  only  to  the  extenl  of  h    hearing  on  the  question 

It  i    there  said:   "''.rant,  then,  that  the  sale  was  mad. 
Sunday,  v.  the  rule  of  law  on  such  State  of  farts?     Xothin 


154  ILLEGALITY 

than  absolute  non-action.  It  will  give  neither  party  to  the  contract 
any  assistance,  nor  listen  to  any  complaint.  It  will  leave  the  parties 
where  it  finds  them.  That  is  the  extent  of  the  rule.  It  cannot  be  rea- 
sonably  asserted  that  the  seller  of  the  stock,  L.  D.  Lewis,  could  have 
made  any  maintainable  appeal  to  any  court  for  the  annulment  of  the 
trade  and  the  recovery  of  the  stock.  Equally  in  fault  with  the  buyer, 
A.  F.  Foster,  the  law  would  decline  to  afford  him  any  countenance, 
leaving  him  just  where  it  found  him,  and  where  his  own  act  had 
placed  him.  With  what  show  of  reason  can  it  be  contended  that  the 
attaching  creditor  of  L.  D.  Lewis  could  take  any  step  for  the  assertion 
of  any  claim  to  the  stock  thus  wrongfully  sold  on  Sunday,  which  L.  D. 
Lewis  himself  could  not  take?  But  this  whole  question  has  been  too 
long  and  too  firmly  settled  to  be  now  disturbed.  Neither  L.  D.  Lewis 
nor  the  attaching  creditor  could  dispossess  the  Sunday  purchaser  or 
any  purchaser  under  him.  See  Block  v.  McMurry,  56  Miss.  217,  31 
Am.  Rep.  357,  and  cases  there  cited."     *     *     *     Affirmed. 


FOSS  v.  CUMMINGS. 
(Supreme  Court  of  Illinois,  1S94.    149  111.  353,  36  N.  E.  553.) 

Assumpsit  by  S.  D.  Foss  and  others  against  R.  F.  Cummings  and 
others.  Defendants  obtained  judgment,  which  was  affirmed  by  the 
appellate  court.     Plaintiffs  appeal. 

Wilkin,  J.4  This  is  an  action  of  assumpsit,  begun  in  the  circuit 
court  of  Cook  county,  by  appellants  against  appellees.  The  dec- 
laration contained  the  common  counts  for  goods  sold  and  delivered, 
money  lent,  paid  out,  and  expended,  had  and  received,  interest  due, 
work  and  materials  furnished,  and  money  found  due  on  settlement. 
*  *  *  The  action  was  in  fact  for  money  claimed  by  plaintiffs  to 
have  been  paid  out,  and  for  commissions,  storage,  insurance,  interest, 
and. losses  upon  certain  corn  transactions  in  which  they  acted  as  the 
agents  of  the  defendants.  *  *  *  By  reference  to  volume  40,  p. 
523,  of  Appellate  Court  Reports,  a  statement  of  the  facts  can  be  found, 
and  it  will  not  be  necessary  to  repeat  them  here.  It  will  also  ap- 
pear that  the  transactions  out  of  which  plaintiffs'  claim  is  alleged  to 
have  arisen  were  held  to  be  unlawful,  as  growing  out  of  a  contract  or 
combination  between  the  defendants,  and  to  which  the  plaintiffs  were 
parties,  to  unnaturally  enhance  the  price  of  corn  in  the  market. 

Counsel  for  appellants  seem  to  understand  that  holding  to  apply 
only  to  sales,  and  not  to  purchases,  or  transactions  growing  out  of 
them ;  and  they  insist  that  whereas  their  former  declaration  and  ac- 
count were  for  a  balance  due,  after  giving  the  defendants  credit  for 
the  proceeds  of  certain  sales,  the  declaration  and  bill  of  particulars 
upon  which  the  last  trial  was  had  were  for  the  recovery  of  advances, 

*  Part  of  the  opinion  is  omitted. 


SALES   PROHIBITED    BY   STATUTE  155 

etc.,  on  account  of  purchases,  "without  recognizing  the  sale  of  the 
corn  or  any  part  thereof,  and  without  giving  credit  for  the  proceeds 
of  its  sales,  or  any  part  thereof,  treating  the  corn  so  purchased  in  the 
possession  of  appellants  as  commission  men  and  agents  for  appellees." 
In  this  way  it  is  attempted  to  place  plaintiffs  in  the  position  of  main- 
taining a  lawful  claim,  and  avoid  whatever  illegality  there  may  have 
been  in  the  transactions  between  the  parties  as  to  sales.  This  led  to 
an  unusual  method  of  introducing  the  evidence ;  for  while  it  was  stipu- 
lated that  either  party  might  read,  from  the  transcript  of  the  record 
certified  to  the  appellate  court  from  the  former  trial,  "all  or  any  part 
of  the  evidence  offered  by  them,  or  either  of  them,  at  the  former 
hearing  and  trial,  *  *  *  subject,  however,  to  all  objections  that 
may  be  offered  or  urged  against  the  admission  thereof,  said  objections 
to  have  the  same  effect  as  if  originally  given  by  the  witnesses  being 
called  upon  the  stand,"  still,  counsel  for  plaintiffs  insisted  upon  read- 
ing only  so  much  of  their  former  testimony  as  they  understood  to  re- 
late to  purchases,  and  objected  to  the  reading  of  all  other  parts  thereof. 
The  court  permitted  them  to  elect  what  portions  they  would  read,  but 
overruled  the  objection  as  to  the  reading  of  other  parts  of  it.  The  result 
was  that,  piecemeal,  by  one  party  or  the  other,  the  material  portions 
of  the  evidence  introduced  on  the  former  trial  were  reoffered  on  this. 

It  is  now  insisted  that  the  court  below  erred  in  allowing  defendants 
to  introduce  so  much  of  that  testimony  as  pertained  to  sales  of  corn. 
They  contend  that,  by  the  new  declaration  and  bill  of  particulars,  the 
issues  were  changed.  The  issues  were  formed  on  the  allegations  of 
the  declaration,  and  not  upon  the  copy  of  the  account  between  the 
parties;  but  we  are  unable  to  see  how  the  competency  of  the  evidence 
objected  to  in  any  way  depended  upon  the  items  in  that  account.  Of 
course,  the  plaintiffs  were  not  required  to  offer  proof  of  claims  not 
made  by  them,  but  the  defendants  certainly  had  a  right  to  disprove 
those  claims  if  they  could.  The  testimony  objected  to  tended  to  show, 
if  it  did  not  prove,  that  the  purchases  and  sales  were  alike  a  part  of 
an  unlawful  attempt  to  force  the  corn  market.  The  evidence  read  by 
plaintiffs  and  that  offered  by  the  defendants  did  not  tend  to  prove 
independent  transactions,  hut  parts  of  a  single  scheme. 

We   think  the  circuit   court   ruled   properly   in    disallowing   the   ob 
jeetion.     Moreover,  we  are  unable  to  find,  either  in  the  opinion  of  the 
appellate  court  or  the  evidence  in  this  record,  any   warrant    whatever 
for  the  assumption  that  the  transactions  between  these  parties  v 
lawful  so  Ear  a-  they  related  to  purchase  ,  bul  unlawful  as  to  sale 
In  the  opinion  of  the  court  by  Waterman,  ).,  after  referring  to  the 
evidence,  both  as  to  what  was  to  he  done  in  the  way  of  purchases  and 
sales,  citing,  with  other  testimony,  that  of  Mr.  h'o^s.  one  of  plaintiffs, 
he  says :  "What,  then,  was  this  tran  action?     Vnd,  if  not  an  attempl 
to  come-  ihe  market,  wa     it  in  an)   way  an  unlawful  undertaking 
It  was  clearly  a  combination  to  enhance  the  pri<  e  of  corn.    The  parti* 
who  entered  into  it  had  on  hand,  or  had  purcha  ed,  large  quanti 


156  ILLEGALITY 

of  corn.  It  is  not  pretended  that  they  had  any  use  or  need  for  more.. 
Nevertheless,  they  entered  into  an  agreement  to  purchase  cash  corn 
and  May  options,  as  the  plaintiff  Foss  testifies,  because,  by  buying  up 
the  cash  corn,  the  market  would  advance.  Other  parties  were  also 
large  holders  of  corn,  and  they  were  brought  into  the  arrangement. 
A  combination  was  made,  not  only  to  purchase  corn,  but  to  prevent 
the  free  selling  thereof.  All  the  immense  amount  of  corn  owned  by 
these  parties  was  put  into  the  hands  of  the  plaintiffs.  They  were  to 
control  all,  and  thus,  by  united  holding,  united  purchases,  and  no  sales, 
save  such  as  should  be  for  the  benefit  and  the  interest  of  all,  the  mar- 
ket was  to  be  controlled,  the  price  of  a  staple  commodity,  one  of 
the  prime  necessities  of  life,  enhanced,  and  it  was  expected  great  gains 
would  be  made  by  the  parties  to  the  combination,  while  he  who  had 
corn  to  buy  for  food  would  be  compelled  to  pay,  not  the  price  of  a 
free  market,  but  the  sum  to  which,  by  such  combination, — such  united 
holding  and  withholding, — the  market  might  be  forced." 

We  are  therefore  not  left  merely  to  the  presumption,  arising  from 
the  judgment  of  affirmance  by  the  appellate  court,  that  it  found  the 
whole  scheme  to  be  unlawful,  and  that  plaintiffs  were  parties  to  it, 
but  it  expressly  so  stated  in  its  opinion.  An  attempt  is  made  to  main- 
tain the  position  that  there  is  no  evidence  whatever  in  the  record  to 
support  this  finding,  but  it  has  wholly  failed.  Not  only  does  the  tes- 
timony tend  to  do  so,  but,  in  our  opinion,  it  clearly  sustains  the  con- 
clusion reached  as  announced  in  the  foregoing  quotation. 

The  only  question,  then,  remaining  for  us  to  pass  upon  is,  did  the 
trial  court  err  in  its  rulings  upon  propositions  of  law?  Plaintiffs' 
attorneys  submitted  23  lengthy  statements  in  writing,  and  asked  the 
court  to  hold  them  propositions  of  law  applicable  to  the  case,  all  of 
which  were  refused.  Many  of  them  contained  no  distinct  legal  prop- 
ositions whatever ;  but  it  is  only  necessary  for  us  to  say  that,  if  the 
proposition  held  at  the  request  of  the  defendants  correctly  stated  the 
law  of  the  case,  each  of  those  asked  by  the  plaintiffs  were  necessarily 
erroneous,  and  properly  denied.  .  The  one  held  is  in  the  following  lan- 
guage: "The  court  holds,  as  a  proposition  of  law  applicable  to  this 
case,  that  if  the  corn  known  as  'XX'  corn  was  purchased  and  sold  by 
Foss,  Strong  &  Company,  and  advances  were  made  thereon,  and  stor- 
age and  insurance  were  also  paid  and  advanced  by  them  thereon,  in 
pursuance  of  and  in  the  execution  of  an  agreement,  understanding, 
or  combining  by  the  defendants  to  advance  and  enhance  the  price  of 
corn  above  what  the  market  price  thereof  would  have  been  if  left 
free  from  manipulation  by  buying  up  the  cash  corn  coming  into  the 
Chicago  market,  and  by  keeping  back  and  from  said  Chicago  market 
corn  which  would  otherwise  have  been  brought  to  said  market  for  sale, 
and  Foss,  Strong  &  Co.  were  parties  to,  or  assented  to  and  aided  in, 
such  agreement,  and  acted  in  the  premises  as  the  brokers  or  commis- 
sion men  for  said  defendants,  in  pursuance  of,  and  in  execution  of, 
such  scheme  to  thus  enhance  the  price  of  corn,  then  there  can  be  no 


SALES   PKOHIBITED   BY   STATUTE  157 

recovery  by  the  plaintiffs  for  losses  they  may  have  sustained  in  the 
purchase  and  sale  of  said  corn,  or  for  advances  made  or  expenses  in- 
curred, or  for  commission  for  purchase  and  sale  thereof." 

This  court  is  fully  committed  to  the  rule  of  law  here  announced. 
Craft  v.  McConoughy,  79  111.  346,  22  Am.  Rep.  171 ;  Samuels  v.  Oli- 
ver, 130  111.  73,  22  N.  E.  499.  Our  statute  makes  it  a  penal  offense  to 
"corner  the  market,  or  to  attempt  to  do  so,"  in  relation  to  any  grain 
or  other  commodity,  and  declares  all  contracts  made  for  that  purpose 
void.  Rev.  St.  §  130,  c.  38.  We  are  unable  to  distinguish  the  com- 
bination between  these  parties,  as  found  by  the  appellate  court,  from 
an  attempt  to  corner  the  Chicago  market  in  relation  to  corn.  Prac- 
tically, it  is  that,  and  nothing  else.  But,  whether  it  is  or  not,  it  was  an 
attempt  to  advance  the  price  of  corn  beyond  the  natural  market  by  a 
combination  between  the  parties,  and  that  the  law  condemns  as  against 
public  right  and  void,  and  forbids  the  courts  to  lend  their  aid  to  those 
engaged  therein.  "All  compacts  between  merchants,  speculators,  or 
any  class  of  men  to  elevate  or  depress  the  market  are  injurious  to  the 
public  interest  and  in  restraint  of  trade.  When  such  a  purpose  is  ap- 
parent in  a  contract,  it  strikes  the  agreement  with  nullity.  Such  a 
combination  of  dealers  is  nothing  less  than  a  conspiracy  against  trade. 
entered  into  for  selfish  purposes,  and  tending  to  make  the  poor  poorer, 
and  the  rich  richer.  Whether  the  design  is  to  bring  the  price  of  any 
commodity  to  a  point  below  its  value  in  a  fair  and  open  market,  or 
to  raise  it  above  its  true  worth,  the  illegality  of  the  combination  is  the 
same.  Such  design  will  not  be  furthered  by  the  courts,  though  there 
may  be  circumstances  under  which  the  object  of  such  a  contract  does 
not  sufficiently  appear  to  expose  the  illegality.  If  the  true  character  is 
known,  the  contract  will  be  held  void."  9  Am.  &  Eng.  Enc.  Law.  p. 
.  and  cases  cited.  The  case  of  Arnot  v.  Coal  Co.,  68  N.  Y.  558, 
23  Am.  Rep.  190.  cited  in  the  note,  and  the  authorities  referred  to  in 
the  opinion  in  that  case,  fully  sustain  the  text.  It  makes  no  difference 
that  the  agreement  is  only  in  partial  restraint  of  trade.  If  the  public 
is  injuriously  affected,  (and  that  is  necessarily  so  when  the  combina- 
tends  to  increase  the  price  of  a  commodity  of  general  use,)  it 
is  illegal. 

<  )n  the  facts  of  this  case  as  they  must  be  accepted  by  us,  the  judg- 
ment of  the  circuit  court,  and  its  affirmance  by  the  appellate  court, 
are  clearly  right.  The  judgment  of  the  latter  court  is  affirmed.  Af- 
firmed. 


158  ILLEGALITY 


III.  Effect  of  Illegality  B 


SINGER  MFG.  CO.  v.  DRAPER. 

SAME  v.  LOONEY. 

(Supreme  Court  of  Tennessee,  1899.    103  Tenn.  262,  52  S.  W.  87D.) 

Actions  by  the  Singer  Manufacturing  Company  against  H.  M.  Draper 
and  Mary  Looney,  respectively.  Judgments  for  defendant  in  each 
case,  and  plaintiff  appeals. 

Wilkes,  J.  These  two  suits  are  actions  of  replevin,  and  involve 
substantially  the  same  questions  of  law.  On  the  13th  of  November, 
1896,  the  Singer  Manufacturing  Company,  through  its  local  agent  in 
Hawkins  county,  sold  to  H.  M.  Draper  a  sewing  machine,  and  on  the 
21st  of  February,  1896,  sold  a  machine  to  Mary  Looney,  the  contracts 
in  each  case  being  in  writing  and  the  same ;  the  company  in  each 
case  retaining  the  title  to  the  machines  until  paid  for,  together  with 
a  right  to  retake  them  on  default  of  payment.  Default  was  made 
on  each  machine  after  partial  payments  had  been  made,  and  replev- 
in was  brought  before  a  justice  of  the  peace  for  each,  the  machine 
in  the  Draper  case  being  valued  at  $50,  and  in  the  Looney  case  at 
$40.  The  machines  were  taken  out  of  the  possession  of  the  purchas- 
ers, and  put  into  the  possession  of  the  company.  On  trial  in  the 
circuit  court,  the  judge  held  that  the  company  was  not  entitled  to 
retake  the  machines,  and  gave  judgment  in  the  Draper  case  for  $50, 
the  value  of  the  machine,  and  $19.50  damages  for  the  detention;  and 
in  the  Looney  case  for  $40,  and  $2.50  damages  for  detention ;  and 
the  company  has  appealed  to  this  court,  and  assigned  the  same  er- 
rors in  each  case. 

The  cases  were  heard  upon  an  agreed  statement  of  facts,  and, 
among  others  not  necessary  to  mention,  is  one  that,  when  these  sales 
were  made,  the  company  had  not  paid  any  license  tax  for  1896  to 
sell  machines  in  Hawkins  county,  as  required  by  statute,  and  had 
paid  none  for  five  or  more  years  previous  to  that  date.  The  learned 
circuit  judge  held  that  for  this  failure  to  comply  with  the  law  the  com- 
pany could  not  sue  to  enforce  the  contract,  and  could  have  no  stand- 
ing in  the  courts  for  any  purpose  whatever.  The  company  assigns 
this  holding  as  error.  At  the  time  these  contracts  were  made,  the  act 
of  1895  (Acts  1895,  c.  120)  was  in  force.  Section  65  of  that  act 
provides  that  the  occupations  and  business  transactions  that  should 
be  deemed  privileged  would  be  enumerated  in  the  revenue  law,  and 
should  be  taxed,  and  not  pursued  or  done  without  license.  The 
revenue  act  placed  a  tax  upon  dealers  or  agents  selling  sewing  ma- 

s  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed/)  §§  66-68. 


EFFECT   OF   ILLEGALITY  159 

chines.  It  has  been  held  that  such  provisions  are  an  express  pro- 
hibition against  persons  pursuing  or  exercising  any  of  such  privi- 
leges without  a  license,  and,  if  they  do  so,  their  acts  are  in  viola- 
tion of  law,  and  all  contracts  for  their  enforcement  or  benefit  are 
illegal  and  unenforceable.  Stevenson  v.  Ewing,  87  Tenn.  46,  9  S. 
W.  230;  Lumber  Co.  v.  Thomas,  92  Tenn.  587,  22  S.  W.  743. 

This  holding  has  been  followed  and  repeated  too  often  to  require 
further  citation.  The  courts  will  not  enforce  contracts  made  in  open 
violation  of  law,  and  will  give  no  relief,  either  by  way  of  enforcing 
the  contract  or  giving  damages  for  its  breach.  It  is  said  by  the 
company,  however,  that  it  is  not  suing  to  enforce  the  contract,  but 
to  recover  the  machines,  and  this  it  has  the  right  to  do,  even  if  the 
contract  be  void.  The  contract  upon  its  face  provides  that,  on  de- 
fault of  payment,  the  company  may  retake  the  machines.  To  allow 
it  to  do  so  will,  it  is  plain,  be  to  enforce  the  contract.  To  allow  it 
to  do  so  would  be  to  put  a  premium  upon  its  violation  of  law.  In 
other  words,  it  is  to  permit  it  to  make  an  illegal  contract,  receive 
part  payment  thereon,  and  then  repudiate  it  and  retake  the  property, 
and  retain  the  amount  paid.  It  may  be  remarked  that  the  suits  were 
commenced  before  a  justice  of  the  peace.  One  involves  $50  and 
the  other  less.  The  statute  requires  them  to  be  heard  upon  equita- 
ble principles,  in  the  same  manner  as  in  courts  of  chancery.  Xow,  if 
we  could  hold  (which  we  do  not)  that  plaintiff  could  retake  the  ma- 
chines as  upon  a  repudiation  of  the  contracts,  it  could  only  do  so 
upon  condition  that  it  refund  the  amounts  received  upon  the  sal 
This  it  has  not  done  nor  offered  to  do.  It  must  be  borne  in  mind 
that,  as  between  the  parties,  the  contract  is  not  void,  and  the  prin- 
ciple which  prevents  the  plaintiff's  recovery  is  that  the  courts  will 
lend  their  aid  to  enforce  contracts  and  transactions  made  in  fraud 
and  violation  of  its  laws,  and  which  it  has  impliedly  prohibited.  Nor 
will  it  lend  its  aid  to  repudiate  them  in  order  to  enable  a  party  mak- 
ing them  to  reap  a  benefit  therefrom,  and  this  on  grounds  of  public 
policy.     The  judgments  are  affirmed,  with  costs. 


KNIGHTS  v.  BROWN. 

BRIDGES  v.  BRIDGES. 

(Supreme  .Tndi^ini  Court  of  Maine,   1900.     '.»::   Me.  567,    r>  All.  827.) 

Action  by  Amelia  D.  Knights  against  Richard  VV.  Brown  and  an- 
other, and  by  John  !•'..   Bridges  against  Albert   Bridges.     Nonsuit  or- 
■  1  in  both  '  ind  plaintiffs  exi  ept. 

1 1  a- M. [.i,,  ]/■    'I'h.  turn  upon  the  construction  of  the 

-.mic   Statute,  .'Hid  are  then  ldcred   in  one  opinion. 

■  The  i tatement  of  fad 9  is  omitted. 


160  ILLEGALITY 

The  first  is  an  action  of  assumpsit  to  recover  the  purchase  money 
paid  for  a  horse  bought  on  Sunday.  The  plaintiff  tendered  a  return 
of  the  horse  for  breach  of  warranty  of  soundness,  which  was  refused, 
and  sues  for  the  price  paid  for  it.  The  sale  was  on  Sunday.  The 
plaintiff  was  nonsuit,  and  has  exception. 

The  second  is  an  action  on  the  case  to  recover  damages  sustained  for 
negligently  letting  a  carriage  that  was  unsafe  and  unsuitable  for  the 
uses  for  which  it  had  been  hired.  The  hiring  was  on  Sunday,  and  the 
damage  suffered  was  on  Sunday.  The  plaintiff  was  nonsuit,  and  has 
exception. 

To  both  cases,  section  20,  c.  124,  Rev.  St.,  is  interposed,  as  a  de- 
fense. In  reply,  section  116,  c.  82,  Id.,  is  invoked  in  the  first  case,  and 
Acts  1895,  c.  129,  in  the  second  case.  The  former  statute,  inherited 
from  Massachusetts,  was  upon  the  erection  of  our  state  enacted  in 
Acts  1821,  c.  9,  §  2.  Among  other  things,  it  prohibits  business,  except 
works  of  charity  or  necessity,  upon  the  Lord's  Day.  By  a  long  line  of 
decisions,  this  court  has  held  that,  by  reason  of  that  statute,  a  contract 
made  on  Sunday  is  void  between  the  parties,  and  that  the  considera- 
tion therefor  cannot  be  recovered  back,  and  that  a  tort  arising  from 
such  contract  will  not  support  an  action  for  damages.  Towle  v.  Lar- 
rabee,  26  Me.  464;  Hilton  v.  Houghton,  35  Me.  143;  Morton  v.  Glos- 
ter,  46  Me.  520;  Bank  v.  Mayberry,  48  Me.  198;  Pope  v.  Linn,  50 
Me.  83;  Tillock  v.  Webb,  56  Me.  100;  Parker  v.  Latner,  60  Me.  528, 
11  Am.  Rep.  210;  Plaisted  v.  Palmer,  63  Me.  576;  Meader  v.  White, 
66  Me.  90,  22  Am.  Rep.  551 ;  Mace  v.  Putnam,  71  Me.  238;  Bank  v. 
Kingsley,  84  Me.  Ill,  24  Atl.  794. 

This  act  of  1821,  was  found,  in  practice  to  work  a  fraud,  by  allow- 
ing one  party  to  a  Sunday  contract  to  retain  his  fruit  of  the  transac- 
tion, and  to  give  the  other  party  none;  so  the  legislature,  in  1880 
(Rev.  St.  c.  82,  §  116),  enacted  that  he  who  receives  a  valuable  con- 
sideration for  a  contract  made  on  Sunday  shall  not  defend  against  it 
on  that  ground  until  he  restores  the  consideration ;  that  is,  if  he  will 
repudiate  the  contract  he  must  first  restore  his  gains  from  it, — a  whole- 
some doctrine,  that  will  not  allow  a  desecration  of  the  Lord's  Day  to 
become  a  cheat. 

In  the  first  case  at  bar,  the  defendant  sold  a  diseased  horse  for  sound, 
took  the  purchase  money  as  the  price  of  a  sound  horse,  and  tries  to 
keep  it  because  he  cheated  on  Sunday,  or  warranted  the  horse  sound 
on  Sunday,  both  of  which  he  might  do  under  the  statute  of  1821  and 
not  be  accountable  therefor.  The  plaintiff  tendered  a  return  of  the 
horse,  which  was  refused.  The  tender  operated  to  rescind  the  con- 
tract. It  restored  the  parties  to  the  same  condition  they  were  in  before 
the  sale,  and  the  purchase  money  became  the  plaintiff's.  The  defend- 
ant cannot  resist  its  return  because  of  the  old  Sunday  law.  The  same 
result  would  have  followed  had  the  plaintiff  sued  upon  the  contract 
for  a  breach  of  warranty.     The  defendant  could  not  then  have  de- 


EFFECT   OF   ILLEGALITY  1G1 

fended  until  he  had  returned  the  consideration  that  he  had  received 
for  making  the  warranty.  Such  return  would  have  precluded  a  recov- 
ery, for  the  damages  might  have  been  more  than  the  price  paid,  had 
not  the  contract  been  void ;  for  the  plaintiff  would  have  been  entitled 
to  the  benefit  of  his  bargain, — that  is,  the  horse,  if  sound,  might  have 
been  worth  more  than  the  purchase  price  above  what  he  was  worth 
in  the  condition  sold,  unsound.  A  return  of  the  horse,  followed  by 
a  suit  for  the  price  paid,  amounts  to  substantially  the  same  thing  as  a 
suit  for  breach  of  the  warranty.  In  either  case  the  statute  of  1880 
bars  the  defense  of  Sunday  contract  until  the  price  paid  shall  have 
been  returned.  Wentworth  v.  Woodside,  79  Me.  156,  8  Atl.  763; 
Berry  v.  Clary,  77  Ale.  482,  1  Atl.  360 ;   Bank  v.  Kingsley,  supra. 

In  the  second  case  at  bar,  the  plaintiff  procured  another  to  hire  for 
her,  on  Sunday,  a  horse  and  carriage  for  driving.  The  carriage  let 
was  unsafe,  whereby  the  plaintiff  was  injured.  She  sues  for  damages 
received  from  the  defective  carriage  while  driving  on  Sunday.  The  act 
of  1821,  as  before  seen,  would  bar  recovery  (Wheelden  v.  Lyford,  84 
Me.  114,  24  Atl.  793) ;  but  the  legislature  enacted  in  Acts  1895,  c.  129, 
that  the  act  of  1821  (Rev.  St.  c.  124,  §  20)  shall  not  bar  "any  action 
for  a  tort  or  injury  suffered  on  Sunday."  The  plaintiff's  injury  was 
suffered  on  Sunday  by  defendants'  tort;  that  is,  their  negligence  in 
letting  an  unsafe  carriage.  It  matters  not  whether  the  plaintiff's  action 
be  assumpsit  for  breach  of  an  implied  warranty  to  furnish  a  suitable 
carriage,  or  case  for  negligence  in  not  so  doing.  In  either  case,  the 
action  would  be  for  an  "injury  suffered"  on  Sunday,  and  this  the  act 
of  1895  expressly  excepts  from  the  operation  of  the  statute  of  1821. 

Exceptions  sustained.    Both  actions  to  stand  for  trial. 


DUNLOP  v.  MERCER. 

In  re  DUNLOP. 

(Circull  Court  of  Appeals,  Eighth  Circuit,  K>07.    156  Fed.  545,  80  C.  C.  A.  135.) 

Appeal  from  the  District  Court  of  the  United  States  for  the  District 
of  .Minnesota. 

Petition  to  Revise  Proceedings  of  the  District  Court  in  a  Bankruptcy 
Matter. 

Before  Sanborn  and  Vax  Devanter,  Circuit  Judges,  and  rmi<- 
District  Judj 

nborn,  Circuit  Jud  Two  corporations  of   Arizona,  which 

had  been  doing  bu  iness  in   Minnesota,  were  adjudged  bankrupts  in 

Stat(     I  '  i  loiirl  in  thai  state.    The  tin  ire  <>!'  one  of 

them,  of  the  Waterbury-Zimmer  [mplement  Company,  filed  a  petition 

in  the  court  below  m  the  matter  of  Uic  bankruptcy  of  the  other,  the 

»  Part  "f  tin-  opinion  la'omitt<  d. 

COOLSTCAB]      Sam         II 


1C2  ILLEGALITY 

Western  Implement  Company,  for  an  order  that  certain  vehicles,  ma- 
chinery, and  other  merchandise,  which  were  in  the  possession  of  the 
Western  Company  when  it  was  adjudged  a  bankrupt  and  thence  came 
to  the  possession  of  the  trustees  of  its  estate,  be  delivered  to  the  trustee 
of  the  property  of  the  Zimmer  Company,  because,  as  he  alleged,  this 
property  had  been  sold  and  delivered  by  the  Zimmer  Company  to  the 
Western  Company  under  an  agreement,  dated  February  5,  1906,  to  the 
effect  that  the  title  and  ownership  thereof  should  remain  in  the  vendor 
until  the  goods  were  paid  for  in  cash,  and  no  payment  on  account  of 
them  had  been  made.  The  trustees  of  the  Western  Company  defended 
on  the  grounds  that  the  contract  was  not  made  until  September  8,  1906, 
after  most  of  the  property  had  been  delivered;  that  it  was  made  with 
the  intent  to  defraud  the  creditors  of  the  Western  Company ;  that  it 
was  withheld  from  record  with  like  intent ;  that  the  Zimmer  Com- 
pany was  not  qualified  to  do  business  in  Minnesota  until  June  30,  1906, 
after  the  larger  part  of  the  property  had  been  delivered ;  and  that  the 
contract  on  its  face  evidenced  an  absolute  sale  of  the  property  to  the 
Western  Company.  Evidence  was  introduced,  and  the  court  overruled 
all  the  defenses  except  the  last,  but  sustained  that,  and  denied  the 
prayer  of  the  petition.  This  ruling  was  assigned  as  error,  and  the 
case  is  presented  by  petition  to  revise  and  by  appeal.  As  it  involves 
the  consideration  of  the  evidence  of  the  relation  of  the  parties  and 
of  their  acts  in  making  and  performing  the  contract,  it  will  be  consid- 
ered on  the  appeal,  and  the  petition  to  revise  is  dismissed.  *  *  * 
But  counsel  argue  with  great  ability  and  admirable  ingenuity  that  the 
contract  of  conditional  sale  was  violative  of  the  qualifying  statute,  that 
it  was  consequently  void,  and  therefore  that  the  title  and  ownership 
of  the  property  vested  in  the  Western  Company.  But  the  premises 
of  this  syllogism  fail  to  support  its  conclusion.  If  the  contract  was 
void  because  the  corporation  was  not  authorized  to  do  business  in  Min- 
nesota under  its  statutes,  it  was  void  in  every  part — in  the  agreement 
to  sell,  in  the  condition  of  the  sale,  and  in  the  agreement  to  buy.  An 
agreement  of  absolute  sale  would  have  been  equally  void.  The  con- 
tract was  that  the  title  and  ownership  of  this  property,  which  was  in 
the  vendor,  should  pass  to  the  Western  Company  on  condition  that  it 
paid  its  notes  and  accounts,  and  not  otherwise,  and  that  the  Western 
Company  would  pay  them.  The  latter  company  defaulted,  and,  if  the 
agreement  was  valid,  the  ownership  and  title  remained  in  the  vendor. 
If  the  agreement  was  void,  then  there  was  no  contract  that  the  Western 
Company  should  pay  the  agreed  price  for  the  goods,  or  that  the  Zim- 
mer Company  would  sell  them,  or  that  the  ownership  or  the  title  to 
them  should  ever  pass  to  the  Western  Company,  either  with  or  with- 
out condition,  and  they  remained  in  the  vendor.  If  the  fact  that  the 
corporation  could  not  lawfully  make  any  contract  whatever  in  Minne- 
sota concerning  these  goods  made  its  conditional  sale  of  them  upon 
which  the  minds  of  the  parties  met  void,  it  could  not  have  had  the  ef- 


EFFECT   OF   ILLEGALITY  1G3 

feet  to  create  a  contract  of  absolute  sale  to  which  neither  party  agreed, 
and  which  would  have  been  equally  void.  What  the  appellees  really 
ask  here  is  that  because,  as  they  contend,  the  agreement  of  conditional 
sale  was  illegal  and  void,  this  court  of  equity  shall  make  for  the  parties 
a  new  agreement  of  absolute  sale  to  which  neither  of  them  agreed, 
and  which  would  have  been  equally  void,  and  that  it  proceed  to  enforce 
this  new  agreement,  so  that  the  creditors  of  the  vendee,  may  appro- 
priate to  themselves  property  of  the  value  of  about  $12,000  which 
belongs  in  equity  to  the  creditors  of  the  vendor.  This  petition  does  not 
appeal  with  compelling  force  to  the  conscience  of  a  chancellor,  and  it 
must  be  denied.  The  title  and  ownership  of  the  property  in  contro- 
versy remained  in  the  Zimmer  Company,  and  they  never  passed  to 
the  Western  Company,  or  to  its  trustees,  whether  the  effect  of  the 
statutes  of  Minnesota  relative  to  the  authority  of  a  foreign  corpora- 
tion to  do  business  in  that  state  rendered  the  contract  of  sale  void  or 
left  it  valid. 

Moreover,  if  the  sale  had  been  an  absolute  one,  and  if  it  had  been 
void,  the  trustee  of  the  Zimmer  Company  might  stdl  have  recovered 
this  property.  In  Pullman's  Palace  Car  Co.  v.  Central  Transportation 
Co.,  171  U.  S.  138,  151,  18  Sup.  Ct.  808,  43  L.  Ed.  108,  the  Central 
Company  had  made  a  lease  which  was  beyond  its  powers,  in  restraint 
of  trade,  against  public  policy,  illegal,  and  void.  Central  Transporta- 
tion Co.  v.  Pullman's  Car  Co.,  139  U.  S.  24,  S3,  11  Sup.  Ct.  478,  35 
L.  Ed.  55.  It  had  made  this  lease  in  the  year  1870,  and  had  thereby 
stripped  itself  of  all  its  property,  and  the  lessee,  which  had  been  in 
possession  of  this  property  and  of  its  proceeds  under  this  void  contract 
for  more  than  10  years,  refused  to  perform  its  part  of  the  agreement, 
or  to  deliver  back  or  to  account  for  the  property,  it  had  received.  The 
Supreme  Court  held  the  contract  illegal  and  void,  but  compelled  the 
:iay  back  to  the  lessor  817,000  in  cash  and  the  value  of  the 
cars  and  other  property  which  it  had  received  from  the  lessor  under 
the  void  agreement,  and  which  amounted  in  all  to  $727,846.50  and  in- 
terest. That  cant  said:  "The  courts,  whili  ing  to  maintain  any 
action  upon  the  unlawful  contract,  have  always  tried  to  do  jusl 
.cen  the  parties,  so  far  as  could  be  done  consistently  with  ad- 
nce  to  law,  by  permitting  property  or  money,  parted  with  on  the 
faith  of  the  unlawful  contract,  to  be  recovered  hack,  or  con  ition 

to  be  i le  for  it."    Central  Transp.  Co   v.  Car  Co.,  139  U.  S.  60,  11 

Sup.  Ct.  P.   Ed.  55;    Pullman's   Palace  Car  Co.  v.  Central 

Transp.  Co.,  171  U.  S.  150,  18  Sup.  Ct.  808,   13  P.  Ed.  108. 

IP  1  for  the  appellee-  claim,  the  contract  evidenced  an  a 

.  and  it  is  void,  no  paymenl  has  ever  been  made   for  the 

property  under  consideration  which  the  id  the  trustees  of  its 

■   ined  under  this  agreement.     No  legal  o         le  is  perceived, 

in  the  lighl  of  tl  i  in  1  'ullman's  1  'a         I  !ar  ( lompany' 

to  requiring  them  to  r<  it  to  the  trustee  of  the  vendor  for  the 


1G4  ILLEGALITY 

benefit  of  its  creditors  to  whom  it  in  equity  belongs,  and  no  court 
which  strives  to  do  justice  and  succeeds  would  fail  to  do  so.  There 
would  be  in  such  a  case  an  implied  and  an  enforceable  contract  by  the 
vendee  to  return  the  property,  or  its  value,  which  it  had  secured  with- 
out consideration  under  the  void  contract.  Planters'  Bank  v.  Union 
Bank,  16  Wall.  433,  21  L.  Ed.  473;  In  re  Hovey's  Estate,  193  Pa. 
385,  48  Atl.  311,  315. 

But  was  the  contract  void  ?  Its  only  infirmity  was  that  the  Zimmer 
Company  failed  to  comply  with  the  regulations  of  the  statute  of  Min- 
nesota which  conditioned  its  authority  to  make  the  contract,  regula- 
tions with  which  it  had  ample  power  to  comply,  and  that  the  statute 
imposed  a  penalty  of  $1,000  and  a  disqualification  to  maintain  suits  in 
the  courts  of  that  state  for  a  failure  to  comply  with  those  regulations. 
The  making  and  performance  of  the  agreement  were  not  morally 
wrong.  In  the  absence  of  the  statute  there  was  no  more  evil  in  the 
doing  of  business  by  a  foreign  corporation  in  the  state  of  Minnesota 
without  a  principal  place  of  business,  an  appointed  agent  to  accept 
service,  and  the  payment  of  a  license  tax,  than  there  was  in  so  doing 
with  them.  The  business  which  this  corporation  transacted  was  not, 
like  the  sale  of  liquor,  a  peril  to  the  welfare  of  the  citizens  of  the  state 
and  subject  to  regulation  by  its  police  power.  It  was  the  sale  of  ma- 
chinery. It  was  a  transaction  of  commerce,  which  was  a  benefit  to  the 
state  and  to  its  people.  There  was  no  moral  turpitude  and  no  peril  to 
the  citizens  in  the  making  or  the  performance  of  this  contract.  Still, 
it  was  undoubtedly  violative  of  the  statute  and  illegal. 

Counsel  invoke  the  general  rules  that  an  illegal  contract,  a  contract 
in  violation  of  the  law  of  a  state,  is  void  and  unenforceable  in  any 
court  sitting  in  the  state,  and  that  the  federal  courts  follow  the  con- 
struction  of  the  Constitution  and  statutes  of  a  state  given  by  its  highest 
judicial  tribunal  in  cases  which  involve  no  question  of  general  juris- 
prudence, of  commercial  law,  or  of  right  under  the  Constitution  and 
laws  of  the  United  States,  and  they  cite  Cooper  Mfg.  Co.  v.  Ferguson, 
113  U.  S.  727,  5  Sup.  Ct.  739,  28  L.  Ed.  1137,  in  which  the  Supreme 
Court  held  that  the  contract  of  an  unqualified  foreign  corporation  for 
the  sale  of  an  engine  and  machinery  in  Colorado  was  not  void  because 
in  making  that  sale  the  corporation  was  not  doing  business  within  the 
state  of  Colorado  and  because  the  business  which  it  transacted  was 
interstate  commerce;  Miller  v.  Amnion,  145  U.  S.  421,  12  Sup.  Ct. 
884,  36  L.  Ed.  759,  in  which  a  contract  for  the  sale  of  liquor  in  Chi- 
cago without  a  license  was  held  void,  with  the  prefacing  statement 
that  its  sale  was  a  peril  to  the  welfare  of  the  community  and  its  regu- 
lation within  the  police  power  of  the  state;  Diamond  Glue  Co.  v.  U. 
S.  Glue  Co.,  187  U.  S.  611,  613,  23  Sup.  Ct.  206,  47  L.  Ed.  328,  in 
which  a  contract  of  an  unqualified  corporation  to  superintend  the  con- 
struction of  and  to  operate  a  glue  factory  in  the  state  of  Wisconsin  was 
held  void  under  the  statute  of  that  state,  which  expressly  declared, 


EFFECT   OF   ILLEGALITY  1G5 

and  which  the  Supreme  Court  of  that  state  had  held,  made  such  a  con- 
tract "wholly  void"  on  behalf  of  the  foreign  corporation,  but  valid  and 
enforceable  against  it  in  favor  of  the  other  party  to  the  agreement 
(Ashland  Lumber  Co.  v.  Detroit  Salt  Co.,  114  Wis.  66,  89  N.  W.  904) ; 
Chattanooga  N.  B.  &  L.  Ass'n  v.  Denson,  189  U.  S.  408,  23  Sup.  Ct. 
630,  47  L.  Ed.  870,  in  which  a  note  and  mortgage  taken  by  an  unquali- 
fied corporation  in  Alabama  were  held  void  because  the  Supreme  Court 
of  the  state  had  held  like  contracts  void  under  a  statute  of  that  state; 
Trust  Company  v.  Krumseig,  172  U.  S.  351,  19  Sup.  Ct.  179,  43  L,. 
Ed.  474,  which  has  been  reviewed  supra;  and  Kibbe  v.  Stevenson  Iron 
Min.  Co.,  136  bed.  147,  69  C.  C.  A.  145,  and  other  cases  which  do  not 
relate  to  this  specific  question.  Many  other  cases,  however,  which  treat 
of  this  subject,  have  been  carefully  read  and  considered,  and  they  are 
cited,  and  some  of  them  are  reviewed,  in  Butler  Bros.  Shoe  Co.  v. 
U.  S.  Rubber  Company,  156  Fed.  1,  84  C.  C.  A.  167,  which  was  consid- 
ered and  decided  with  this  case,  and  to  which  reference  is  made  for 
citations. 

The  general  rule  that  an  illegal  contract  is  void  and  unenforceable 
is,  however,  not  without  exception.  It  is  not  universal  in  its  applica- 
tion. It  is  qualified  by  the  exception  that  where  a  contract  is  not  evil 
in  itself,  and  its  invalidity  is  not  denounced  as  a  penalty  by  the  express 
terms  of  or  by  rational  implication  from  the  language  of  the  statute 
which  it  violates,  and  that  statute  prescribes  other  specific  penalties, 
it  is  not  the  province  of  the  courts  to  do  so,  and  they  will  not  thus  affix 
an  additional  penalty  not  directed  by  the  lawmaking  power.  Fritts 
v.  Palmer,  132  U.  S.  282,  289,  293,  10  Sup.  Ct.  93,  33  L.  Ed.  317;  Na- 

al  Bank  v.  Matthews,  98  U.  S.  621,  629,  25  L.  Ed.  188;  L< 
County  Bank  v.  Townsend,  139  U.  S.  67,  76,  11  Sup.  Ct.  496.  35  L. 
Ed.  107;  Thompson  v.  St.  Nicholas  Nat.  Bank,  146  U.  S.  240,  13 
Sup.  Ct.  66,  36  L.  Ed.  956;  Blodgett  v.  Lanyon  Zinc  Co.,  120  Fed. 
7,  58  C.  C.  A.  79,  82,  83;  Sioux  City,  etc.,  Co.  v.  Trust 
Co.,  82  Fed.  124,  134,  27  C.  C.  A.  73,  83;  Hanover  Nat.  Bank  v. 
Fat.  Hank,  109  Fed.  421,  426,  48  C.  C.  A.  ^S_>.  487;  Speer  v. 
Board  of  County  Com'rs,  88  Fed.  749,  758,  32  C.  C.  A.  101.  110; 
National  Bank  of  Xenia  v.  Stewart,  107  U.  S.  676,  2  Sup.  Ct.  77i<, 
27  L.  Ed.  592;  Gold  Mining  Co.  v.  Nat.  Bank,  96  U.  S.  640,  24  L,.  Ed. 

;    O'Hare  v.   Bank,  77  Pa.  (V;    Pangborn  v.  Westlake,  36  towa, 
a  R.  &  C.  R.  Co.  v.  Evans,  14  C.  C.  A.  116,  121,  122, 

Fed.  809,  815.    *    *    * 
The  contracl  in  suit  was  innocent  in  it  !'  because  it  v 

violative  of  the  statute ;  bul  it  wa    nol  void,  and  the  trustee  of  the  ven 

was  the  owm  r  of  th<   pn  ipert.3  in  1  ontroversy  under  it.    The  order 
of  the  courl  below,  which  denied  his  petition  for  a  return  of  the  prop 

■  1,  and  the  I  be  remanded 

to  the  coi      ;     ow,  with  instructions  to  take  further  proceedings  nol 
incon  istent  with  the  view.,  expressed  in  this  opinion,    tt  is  so  ordered. 


166  CONDITIONS    AND    WARRANTIES 


CONDITIONS  AND  WARRANTIES 
I.  In  General 1 


POPE  v.  ALUS. 

(Supreme  Court  of  United  States,  18S5.     115  U.  S.  363,  6  Sup.  Ct.  69,  29    ' 

L.  Ed.  393.) 

Edward  P.  Allis,  the  defendant  in  error,  was  the  plaintiff  in  the 
circuit  court.  He  brought  his  suit  to  recover  from  the  defendants 
Thomas  J.  Pope  and  James  E.  Pope,  now  the  plaintiffs  in  error,  the 
sum  of  $17,840,  the  price  of  500  tons  of  pig-iron,  which  he  alleged 
he  had  bought  from  them  and  paid  for,  but  which  he  refused  to  ac- 
cept because  it  was  not  of  the  quality  which  the  defendants  had  agreed 
to  furnish.  The  plaintiff  also  demanded  $1,750  freight  on  the  iron, 
which  he  alleged  he  had  paid.  The  facts  appearing  upon  the  record 
were  as  follows : 

The  plaintiff  carried  on  the  business  of  an  iron-founder  in  Mil- 
waukee, Wisconsin,  and  the  defendants  were  brokers  in  iron  in  the 
city  of  New  York.  In  the  month  of  January,  1880,  by  correspondence 
carried  on  by  mail  and  telegraph,  the  defendants  agreed  to  sell  and 
deliver  to  the  plaintiff  500  tons  of  No.  1  extra  American  and  300  tons 
No.  1  extra  Glengarnock  (Scotch)  pig-iron.  The  American  iron  was 
to  be  delivered  on  the  cars  at  the  furnace  bank  at  Coplay,  Pennsyl- 
vania, and  the  Scotch  at  the  yard  of  the  defendants  in  New  York. 
By  a  subsequent  correspondence  between  the  plaintiff  and  the  defend- 
ants it  fairly  appeared  that  the  latter  agreed  to  ship  the  iron  for  the 
plaintiff  at  Elizabethport,  New  Jersey.  It  was  to  be  shipped  as  early 
in  the  spring  as  cheap  freights  could  be  had,  consigned  to  the  National 
Exchange  Bank  at  Milwaukee,  which,  in  behalf  of  the  plaintiff,  agreed 
to  pay  for  the  iron  on  receipt  of  the  bills  of  lading.  That  quantity 
of  American  iron  was  landed  at  Milwaukee  and  delivered  to  the  plain- 
tiff about  July  15th.  Before  its  arrival  at  Milwaukee  the  plaintiff  had 
not  only  paid  for  the  iron,  but  also  the  freight  from  Coplay  to  Mil- 
waukee. Soon  after  the  arrival  in  Milwaukee  the  plaintiff  examined 
the  500  tons  American  iron,  to  which  solely  the  controversy  in  this 
case  referred,  arid  refused  to  accept  it,  on  the  ground  that  it  was  not 
of  the  grade  called  for  by  the  contract,  and  at  once  gave  the  defend- 
ants notice  of  the  fact,  end  that  he  held  the  iron  subject  to  their  order, 
and  brought  this  suit  to  recover  the  price  of  the  iron  and  the  freight 
thereon. 

i  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  70-72. 


IN   GENERAL  167 

The  defenses  relied  on  to  defeat  the  action  were  (1)  that  the  iron 
delivered  by  the  defendants  to  the  plaintiff  was  Xo.  1  extra  American 
iron,  and  was  of  the  kind  and  quality  required  by  the  contract ;  and  (2) 
that  the  title  having  passed  to  the  plaintiff  when  the  iron  was  shipped 
to  him  at  Elizabethport,  he  could  not  afterwards  rescind  the  contract 
and  sue  for  the  price  of  the  iron  and  the  freight  which  he  had  paid, 
but  must  sue  for  a  breach  of  the  warranty. 

It  was  conceded  upon  the  trial  that  if  the  plaintiff  was  entitled  to 
recover  at  all,  his  recovery  should  be  for  $22,315.40.  The  defendants 
pleaded  a  counter-claim  for  $5,311,  which  was  admitted  by  the  plain- 
tiff. The  jury  returned  a  verdict  for  the  plaintiff  for  $16,513.11,  for 
which  sum  and  costs  the  court  rendered  a  judgment  against  the  de- 
fendants.    This  writ  of  error  brings  that  judgment  under  review. 

Woods,  J.2  *  *  *  4.  The  assignment  of  error  mainly  relied 
on  by  the  plaintiffs  in  error  is  that  the  court  refused  to  instruct  the 
jury  to  return  a  verdict  for  the  defendants.  The  legal  proposition 
upon  which  their  counsel  based  this  request  was  that  the  purchaser  of 
personal  property,  upon  breach  of  warranty  of  quality,  cannot,  in  the 
absence  of  fraud,  rescind  the  contract  of  purchase  and  sale,  and  sue 
for  the  recovery  of  the  price.  And  they  contended  that,  as  the  iron 
was  delivered  to  defendant  in  error  either  at  Coplay  or  Elizabethport. 
and  the  sale  was  completed  thereby,  the  only  remedy  of  the  defendant 
in  error  was  by  a  suit  upon  the  warranty.  It  did  not  appear  that  at 
the  date  of  the  contract  the  iron  had  been  manufactured,  and  it  was 
shown  by  the  record  that  no  particular  iron  was  segregated  and 
propriated  to  the  contract  by  the  plaintiffs  in  error  until  a  short  time 
before  its  shipment,  in  the  latter  part  of  April  and  the  early  part  of 
May.  The  defendant  in  error  had  no  opportunity  to  inspect  it  until 
it  arrived  in  Milwaukee,  and  consequently  never  accepted  the  partic- 
ular iron  appropriated  to  fdl  the  contract.  It  was  established  by  the 
verdict  of  the  jury  that  the  iron  shipped  was  not  of  the  quality  required 
by  the  contract.  Under  these  circumstances  the  contention  of  the 
plaintiffs  in  error  is  that  the  defendant  in  error,  although  the  iron  ship 
ped  to  him  was  not  what  he  bought,  and  could  not  lie  used  in  busim 
was  bound  to  keep  it,  and  could  only  recover  the  difference  in  value 
between  the  iron  for  which  he  contracted  and  the  iron  which  was  de- 
livered to  him. 

We  do  not  think  that  such  is  the  law.    When  the  subject  matter  of 
)  tence,  or  nol         rtained  at  the  time  of  the  contract, 
an  undertaking  that  it  shall,  when  existing  or  ascertained,  possi 
tain  qualities,  is  not  a  mere  warranty,  hut  a  condition,  the  pei  f  irmance 
of  which  is  precedent  to  any  obligation  upon  the  vendee  under 
contract;    because  the  existence  of  tho  e  qualitii  g  part  of  the 

ription  of  the  thing  sold  becom tial  to  its  identity,  and  the 

vendee  cannot  be  obliged  t'  .e  and  pa)-  for  a  thing  different  from 

r. i  rt  '.r  i  be  opinion  is  omlttt  d. 


1G8  CONDITIONS    AND    WARRANTIES 

that  for  which  he  contracted.  Chanter  v.  Hopkins,  4  Mees.  &  W. 
404;  Barr  v.  Gibson,  3  Mees.  &  W.  390;  Gompertz  v.  Bartlett,  2  EL 
&  Bl.  849;  Okell  v.  Smith,  1  Stark,  N.  P.  107;  notes  to  Cutter  v. 
Powell,  2  Smith,  Lead.  Cas.  (7th  Amer.  Ed.)  37 ;  Woodle  v.  Whitney, 
23  Wis.  55,  99  Am.  Dec.  102;  Boothby  v.  Scales,  27  Wis.  626;  Fair- 
field v.  Madison  Manuf'g  Co.,  38  Wis.  346.  See,  also,  Nichol  v.  Godts, 
10  Exch.  191.  So,  in  a  recent  case  decided  by  this  court,  it  was  said 
by  Mr.  Justice  Gray :  "A  statement"  in  a  mercantile  contract  "descrip- 
tive of  the  subject-matter  or  of  some  material  incident,  such  as  the 
time  or  place  of  shipment,  is  ordinarily  to  be  regarded  as  a  warranty 
in  the  sense  in  which  that  term  is  used  in  insurance  and  maritime  law ; 
that  is  to  say,  a  condition  precedent  upon  the  failure  or  non-perform- 
ance of  which  the  party  aggrieved  may  repudiate  the  whole  contract." 
Norrington  v.  Wright,  115  U.  S.  188,  6  Sup.  Ct.  12,  29  L.  Ed.  366. 
See,  also,  Filley  v.  Pope,  115  U.  S.  213,  6  Sup.  Ct.  19,  29  L.  Ed.  372. 
And  so,  when  a  contract  for  the  sale  of  goods  is  made  by  sample,  it 
amounts  to  an  undertaking  on  the  part  of  the  seller  with  the  buyer  that 
all  the  goods  are  similar,  both  in  nature  and  quality,  to  those  exhibited, 
and  if  they  do  not  correspond  the  buyer  may  refuse  to  receive  them ; 
or,  if  received,  he  may  return  them  in  a  reasonable  time  allowed  for  ex- 
amination, and  thus  rescind  the  contract.  Lorymer  v.  Smith,  1  Barn.  & 
C.  1 ;    Magee  v.  Billingsley,  3  Ala.  679. 

The  authorities  cited  sustain  this  proposition :  that  when  a  .vendor 
sells  goods  of  a  specified  quality,  but  not  in  existence  or  ascertained, 
and  undertakes  to  ship  them  to  a  distant  buyer,  when  made  or  ascer- 
tained, and  delivers  them  to  the  carrier  for  the  purchaser,  the  latter 
is  not  bound  to  accept  them  without  examination.  The  mere  delivery 
of  the  goods  by  the  vendor  to  the  carrier  does  not  necessarily  bind 
the  vendee  to  accept  them.  On  their  arrival  he  has  the  right  to  inspect 
them  to  ascertain  whether  they  conform  to  the  contract,  and  the  right 
to  inspect  implies  the  right  to  reject  them  if  they  are  not  of  the  qual- 
ity required  by  the  contract.  The  rulings  of  the  circuit  court  were 
in  accordance  with  these  views. 

We  have  been  referred  by  the  plaintiffs  in  error  to  the  cases  of 
Thornton  v.  Wynn,  12  Wheat.  184,  6  L.  Ed.  595,  and  Lyon  v.  Bertram, 
20  How.  149,  15  L.  Ed.  847,  to  sustain  the  proposition  that  the  de- 
fendant in  error  in  this  case  could  not  rescind  the  contract  and  sue  to 
recover  back  the  price  of  the  iron.  But  the  cases  are  not  in  point. 
In  the  first,  there  was  an  absolute  sale  with  warranty  and  delivery  to 
the  vendee  of  a  specific  chattel,  namely,  a  race-horse ;  in  the  second,  the 
sale  was  of  a  specified  and  designated  lot  of  flour  which  the  vendee 
had  accepted,  and  part  of  which  he  had  used,  with  ample  means  to 
ascertain  whether  or  not  it  conformed  to  the  contract. 

The  cases  we  have  cited  are  conclusive  against  the  contention  of 
the  plaintiffs  in  error.  The  jury  has  found  that  the  iron  was  not  of 
the  quality  which  the  contract  required,  and  on  that  ground  the  de~ 


IN   GENERAL  1G9 

fendant  in  error,  at  the  first  opportunity,  rejected  it,  as  he  had  a  right 
to  do.    His  suit  to  recover  the  price  was,  therefore,  well  brought. 

Other  errors  are  assigned,  but,  in  our  opinion,  they  present  no 
ground  for  the  reversal  of  the  judgment,  and  do  not  require  discussion. 
Judgment  affirmed. 


PLANO  MFG.  CO  v.  ELLIS. 

(Supreme  Court  of  Michigan,  18SS.    GS  Mich.  101,  35  N.  W.  841.) 

This  is  an  action  of  assumpsit,  commenced  in  the  recorder's  court 
of  the  city  of  Niles,  Michigan,  by  summons  issued  September  26,  1885. 
Plaintiff  declared,  orally,  on  the  common  counts,  in  assumpsit,  and  filed 
this  bill  of  particulars:  "Plaintiff's  declaration:  Common  counts  in 
assumpsit  for  the  price  and  value  of  one  Piano  Manufacturing  Co. 
binder,  sold  and  delivered  to  the  defendant  by  the  plaintiff  for  the 
sum  of  $120."  Defendant  pleaded  the  general  issue,  with  notice.  The 
recorder  rendered  judgment  for  the  defendant,  and  plaintiff  appealed 
to  the  circuit  court,  Berrien  county,  where  judgment  was  rendered  for 
plaintiff.     Defendant  appealed. 

Champlix,  J.  On  the  eighth  day  of  July,  1885,  the  plaintiff, 
through  its  agents  Harder  &  Haynes,  entered  into  an  agreement  with 
defendant  in  writing,  as  follows: 

"Niles,  Michigan,  July  8,  1885. 

"We  hereby  agree  to  let  Peter  Ellis  have  the  sample  Piano  binder, 
1885,  at  same  price  that  Mr.  Ream  has  his  for,  and  the  binder  is  to 
do  good  work  and  give  satisfaction;  and,  if  not,  the  said  Ellis  is  to 
pay  for  use  of  same.  Harder  &  Haynes. 

"Peter  Ellis."  ' 

Plaintiff,  by  its  agents,  delivered  a  Piano  binder  at  defendant's 
farm,  and  set  it  up,  and  put  it  in  operation.  Defendant  used  it  in  cut- 
ting about  95  acres  of  grain,  and  claims  that  it  did  not  do  good  work, 
and  did  not  give  to  him  satisfaction;  and,  on  July  27,  1885,  he  served 
written  notice  on  Harder  &  Haynes,  as  follows : 

"Niles,  Mich.,  July  27,  1885. 
"Messrs.  Harder  &  Haynes — Gentlemen:  The  sample  Piano  binder, 
that  you  let  me  have  on  trial,  docs  not  do  good  work,  and  does  not 
give  satisfaction.  I  am  not  satisfied  with  it.  It  is  at  my  place,  where 
you  left  it,  subject  to  your  order;  you  can  come  and  take  it.  I  am 
willing  to  pay  for  the  use  of  the  same,  and  hereby  offer  so  to  '1". 
ours,  etc.,  Peter  Ellis." 

On  the  trial,  testimony  was  offered  to  show  how  the  machine  worked. 
The  defendant's  counsel  objected  to  its  introduction,  ing  imma 

terial.     The  circuit  jud  uled  the  objection,  and  admitted  the 

testimony,  saying:   "My  opinion  of  the  construction  of  this  contract 
is  this:    that  it  is  to  be  a  sat  ry  machine,  not  to  him,  but  such 


170  CONDITIONS    AND    WARRANTIES 

as  people  knowing  the  quality  of  machines  would  be  satisfied  with; 
it  is  to  do  satisfactory  work." 

Under  this  ruling  a  large  amount  of  testimony  was  received  as  to 
the  working  of  the  machine  while  in  defendant's  possession,  and  the 
circuit  judge,  construing  the  instrument,  in  his  charge  to  the  jury,  in- 
structed them  as  follows :  "As  I  said  in  the  outset,  this  word  'satisfac- 
tion' has  no  further  significance  than  the  fact  that  it  should  be  a  good 
■  machine,  and  do  good,  reasonable  work,  which  would  be  satisfactory 
to  intelligent,  reasonable  men  using  machinery."  'And  again :  "The 
question  for  you  to  determine  is,  was  this  machine  capable,  with  proper 
management,  of  doing  as  good  work  as  those  that  are  called  good, 
first-class  machines,  working  through  the  country,  under  the  same  cir- 
cumstances, and  in  the  same  kind  of  grain  ?  Was  it  a  good  machine, 
and  did  it  do  good  work,  under  proper  management,  and  proper  con- 
ditions ;  did  it  do  that  kind  of  work  so  it  should  have  been  satisfac- 
tory to  a  man  of  intelligence  in  relation  to  this  kind  of  machines ;  did 
it  do  that?    That  is  the  question." 

We  are  of  opinion  that  the  circuit  court  erred  in  the  construction 
which  he  placed  upon  the  contract.  A  cardinal  axiom,  in  the  construc- 
tion of  written  contracts,  is  that  all  the  parts  must  be  examined,  and 
effect  given  to  every  word  and  phrase,  if  practicable.  Vary  v.  Shea, 
36  Mich.  388;  Norris  v.  Showerman,  Walk.  Ch.  206;  Id.,  2  Doug.  16; 
Paddock  v.  Pardee,  1  Mich.  421;  Howell  v.  Richards,  11  East,  643. 
The  object  is  to  arrive  at  the  intention  of  the  parties;  and  this  is  to 
be  deduced  from  the  language  employed  by  them  to  express  their  in- 
tention. If  the  language  employed  is  not  free  from  doubt  or  uncertainty, 
resort  may  be  had  to  the  condition  of  the  respective  parties,  the  subject- 
matter  of  the  contract,  and  the  circumstances  surrounding  the  trans- 
action and  connected  with  it,  and  everything  except  the  contempora- 
neous and  previous  declarations  of  the  parties,  for  the  purpose  of 
enabling  the  court  to  ascertain  the  intention  of  the  parties.  Mills  v. 
Spencer,  3  Mich.  127,  136.  Applying  the  above  principles  of  con- 
struction to  the  writing  introduced  as  the  basis  of  plaintiff's  claim,  it 
is  clear  that  the  binder  was  not  only  to  do  good  work,  but  it  was  to 
give  satisfaction  to  defendant.  Unless  he  was  satisfied  with  the  ma- 
chine, although  it  did  good  work,  he  was  not  bound  to  purchase.  The 
construction  placed  on  the  instrument  by  the  circuit  judge  completely 
nullify  the  words  "and  give  satisfaction."  He  construed  them  as  syn- 
onymous with,  to  do  satisfactory  work,  such  as  people  knowing  the 
quality  of  machines  would  be  satisfied  with ;  or,  to  use  his  own  lan- 
guage, "this  word  'satisfaction'  has  no  further  significance  than  the 
fact  that  it  should  be  a  good  machine,  and  do  good,  reasonable  work, 
which  would  be  satisfactory  to  reasonable  men  using  machinery." 

This,  certainly,  is  not  the  usual  signification  of  the  word,  and  there 
is  nothing  in  the  context,  or  in  the  subject-matter,  which  indicates  that 
the  word  was  used  in  any  other  than  its  ordinary  meaning.  The  ven- 
dor had  already  agreed  that  the  binder  should  "do  good  work,"  and  if 


IN   GENERAL  171 

the  learned  judge  had  defined  that  phrase  in  the  same  way  he  did  the 
word  "'satisfaction,"  it  would  have  been  applicable  and  proper.  No 
one  can  read  this  writing,  and  give  to  the  words  their  ordinary  mean- 
ing, without  understanding  that  something  more  was  required  than 
that  the  binder  should  do  good  work  before  defendant  was  obliged  to 
keep  and  pay  for  the  machine.  He  was  not  obliged  to  do  so  unless, 
also,  it  gave  satisfaction  to  him.  We  may  not  take  judicial  notice  of 
the  fact,  but  we  may  well  suppose  that  there  is  a  choice  between  ma- 
chines for  reaping  and  binding  that  do  good  work.  It  may  be  that 
a  machine  which  will  do  good,  satisfactory  work  in  reaping  and  bind- 
ing, may,  at  the  same  time,  have  more  side-draught  than  another,  or  it 
may  be  so  geared  as  to  require  much  more  power  to  propel  it  than  an- 
other, or  its  machinery  may  be  complicated,  and  so  constructed  as  to 
easily  get  out  of  repair,  or  require  greater  care  and  skill  in  operating  it. 
All  these  things  may  not  be  impossible,  or  even  improbable.  How,  then, 
can  it  be  said  that,  although  it  does  good  work,  nevertheless  it  may 
not  give  satisfaction?  Or  why  should  it  be  said,  when  the  bargainer 
has  reserved  the  right  to  elect  whether  he  be  fully  pleased  or  not,  that 
he  is  bound  to  be  pleased  if  another  reasonable  or  intelligent  man  is 
pleased  with  the  work  of  such  machine?  There  is  another  clause  in 
the  contract  which  has  a  bearing  upon  the  question.  It  is  stipulated 
that  if  the  machine  does  not  do  good  work,  and  give  satisfaction,  the 
said  Ellis  is  to  pay  for  the  use  of  the  same.  It  cannot  be  contended, 
with  reason,  that  Ellis  agreed  to  pay  for  the  use  of  a  machine  that 
did  not  do  good  work.  This  clause  implies  that  it  may  do  good  work, 
and  yet  not  give  satisfaction  so  that  he  will  be  willing  to  keep  and 
pay  for  it.  He  agreed  that,  if  it  did  not  do  good  work,  and  give  sal 
isfaction,  he  would  pay  for  the  use  of  the  binder.  He  was  entitled. 
under  the  agreement,  to  give  the  machine  a  thorough,  practical  trial; 
and  then,  if  he  was  not  satisfied  with  it,  he  was  to  pay  for  the  use  of 
it.  This  provision  entitles  the  writing  to  a  liberal  construction  in  his 
favor.  It  shows  that  he  had  an  option  to  accept  or  reject  the  hinder, 
according  as  it  gave  him  satisfaction  or  not. 

A  proper  construction  of  the  contract  clearly  livings  it  within  the 
first  class  of  such  contracts  referred  to  in  Machine  Co.  v.  Smith,  50 
Mich.  565-569,  15  N.  W.  906,  45  Am.  Rep.  57,  and  is  governed  by 
the  decision  in  that  case.  The  judgment  must  be  reversed  and  a  new 
trial  granted. 


172  CONDITIONS    AND    WARRANTIES 


II.  Warranties  8 


J.  I.  CASE  PLOW  WORKS  v.  NILES  &  SCOTT  CO. 

(Supreme  Court  of  Wisconsin,  1S95.    90  Wis.  590,  63  N.  W.  1013.) 

Action  by  the  J.  I.  Case  Plow  Works  against  the  Niles  &  Scott 
Company,  for  breach  of  warranty.  There  was  a  judgment  for  plain- 
tiff, from  which  both  parties  separately  appeal. 

The  plaintiff  brought  action  against  the  defendant  company,  engaged 
in  the  manufacture  of  wheels  for  agricultural  implements,  to  recover 
damages  sustained  by  reason  of  the  breach  of  warranty  of  11,000 
such  wheels,  ordered  and  purchased  of  the  defendant  under  a  written 
contract  dated  August  16,  1888,  which,  it  appears,  was  a  written  or- 
der given  by  the  plaintiff  to  the  defendant,  and  accepted  by  the  lat- 
ter, in  writing,  as  follows; 

"You  may  enter  our  order  for  our  season's  wants  on  the  following 
styles  of  wheels,  and  at  the  prices  and  terms  named: 

32-in.  walking  cultivator  wheel,  V/±  rim,  half  oval,  8  steel  spokes  or 
10  iron  spokes,  % $    60  each 

32-in.  walking  cultivator  wheel,  lVi  rim,  half  oval,  8  steel  or  10 

iron  spokes,  % 59  each 

32-in.  sulky  wheel,  21/!  rim,  half  oval,  14  steel  spokes,  % 100  each 

24-in.  wheel,  2  in.  double  channel  rim,  8  steel  spokes,  % 70  each 

********** 

"You  to  guaranty  the  wheels  against  breakage  in  shipping,  and 
against  defects  in  material  and  workmanship.     *     *     *  '■ 

It  was  alleged  in  the  plaintiff's  complaint  that  the  defendant,  at 
the  time  of  entering  into  the  contract,  well  understood  and  knew 
that  the  plaintiff  desired  said  wheels  to  attach  to  the  farm  machinery 
manufactured  by  it,  such  as  cultivators,  etc.,  and  that  the  defendant 
guarantied  the  wheels  as  above  stated,  and  that  said  wheels  should 
be  proper  and  suitable  for  the  purposes  for  which  the  plaintiff  de- 
sired them ;  that  the  plaintiff  ordered  and  received  of  the  defendant, 
under  the  contract,  wheels  to  the  number  of  11,000,  and  paid  it  there- 
for $7,331.12;  that  at  the  time  of  the  sale  such  wheels  were  defective 
in  material,  construction,  and  workmanship,  and  were  totally  unfit 
for  the  uses  and  purposes  for  which  the  plaintiff  purchased  them, 
to  its  damage  of  $7,331.12;  that  the  plaintiff,  at  great  expense,  and 
relying  on  said  guaranty,  placed  large  numbers  of  such  wheels  upon 
plows,  cultivators,  etc.,  and  placed  the  same  on  the  market,  and, 
when  tested,  said  wheels  were  found  worthless,  and  a  large  number 
of  such  plows,  cultivators,  etc.,  were  returned  by  the  various  purchas- 
ers of  the  same,  and  the  plaintiff  was  put  to  $5,000  expenses  in  the 

3  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  73-75. 


WARRANTIES  173 

premises,  and  by  reason  of  such  defective  wheels  it  lost  the  sale  of  a 
large  number  of  its  machines  and  implements,  and  suffered  injury 
to  its  business  and  reputation. 

The  defendant  denied  that  it  made  any  other  or  further  war- 
ranties than  those  expressed  in  the  contract,  and  it  alleged  that,  prior 
to  making  the  contract,  samples  of  wheels  were  carefully  examined 
and  tested  by  the  plaintiff,  and  that  it  had  full  knowledge  of  the  prin- 
ciple of  construction  of  said  wheels,  and  of  the  material,  workman- 
ship, and  quality  thereof,  and  of  all  weakness,  if  any,  and  liability 
to  breakage,  except  from  defective  material  or  workmanship,  and 
made  selection  of  the  kind  of  wheels  it  desired,  and  of  the  materials 
thereof,  and  assumed  the  risk  of  failure  or  breakage,  except  from 
shipment,  defective  materials  or  workmanship. 

Pixxey,  J.4  The  finding  of  the  court  proceeds,  in  part,  upon  the 
basis  of  an  implied  warranty  that  the  wheels  were  suitable  for  the 
purpose  for  which  the  plaintiff  desired  them,  namely,  "for  our  sea- 
son's wants,"  it  being  engaged  in  manufacturing  plows,  cultivators, 
etc.,  intending  to  attach  them  to  such  implements,  with  which  it  was 
supplying  the  trade,  and  in  part  on  the  basis  of  the  written  warranty 
"against  defects  in  material  and  workmanship,"  the  defendants  having 
used  common  iron  in  the  manufacture  of  the  spokes,  and  that  the 
wheels  were  defective  in  material,  and  were  not  fit  and  proper  for  the 
uses  and  purposes  for  which  they  were  desired.  The  plaintiff's  dam- 
ages were  assessed  at  the  gross  sum  of  $4,655.54,  but  how  much  for 
defective  materials,  or  how  much  upon  the  breach  of  the  alleged  im- 
plied warranty,  it  is  impossible  to  say,  nor  does  it  appear  upon  what 
number  of  wheels  the  assessment  was  made ;  so  that,  in  the  view  we 
have  taken  of  the  rights  of  the  parties,  judgment  cannot  be  given  on 
the  finding,  and  a  new  trial  becomes  necessary. 

1.  The  wheels  were  made  specially  for  the  plaintiff,  and  it  specified 
the  sizes,  dimensions,  and  material,  and  had  looked  over  and  examine. 1 
els  of  that  kind  manufactured  by  the  defendant,  which  had  been 
tested  in  the  presence  of  the  plaintiff's  representatives,  as  to  their  qual- 
ity and  strength,  before  signing  the  contract.  In  th(  ice  of  any 
written  or  oral  warranty,  it  seems  to  be  quite  well  established  that  in 
e.  as  the  present  no  warranty  of  the  suitableness  of  the 
wheels   for  the  purpose  desired  can  be  implied.     The  purchaser,  in 

SU(  h  case,  takes  the  risk  of  the  fitness  of  the  wheels  for  their  intended 

:    and  although  it  v.  ted  that  they  were  required  for  a  par 

dcular  purpose,  if  the  known,  defined,  and  described  hind  of  wh 

actually  supplied,  there  was  no  implied  warranty  that   they  would 

answer  the  particular  purpose   intended   by  the  purchaser,  although 

nded  and  ted  t<>  d  This  is  made  clear  in  Leake,  Cont. 

104.    'I  itract  was  not  for  the  manufacture  <<\  wheels  generally, 

to  satisfy  a  required  put  bul  for  the  manufacture  and  deliver}  "i 

*Tbe  statement  <>r  (ai  I    I    abridged  and  pari  <>r  the  opinion  la  omitted 


174  CONDITIONS    AND    WARRANTIES 

a  specific  kind  or  plan  of  wheels,  of  specified  dimensions  and  sizes. 
This  was  the  essential  matter  of  the  contract.  Boiler  Co.  v.  Duncan, 
^7  Wis.  120.  124,  58  N.  W.  232,  41  Am.  St.  Rep.  33;  Chanter  v.  Hop- 
kins, 4  Mees.  &  W.  399;  Ollivant  v.  Bayley,  5  Q.  B.  288;  Jones  v. 
Just,  L.  R.  3  Q.  B.  197,  202 ;  Goulds  v.  Brophy,  42  Minn.  109,  43  N. 
W.  834,  6  L.  R.  A.  392;  Seitz  v.  Machine  Co.,  141  U.  S.  518,  12  Sup. 
Ct.  46,  35  L.  Ed.  837 ;  Deming  v.  Foster,  42  N.  H.  165.  Where,  how- 
ever, a  manufacturer  or  dealer  contracts  to  supply  an  article  which 
he  manufactures  or  produces,  or  in  which  he  deals,  to  be  applied  to  a 
particular  purpose,  so  that  the  buyer  necessarily  trusts  to  the  judg- 
ment or  skill  of  the  manufacturer  or  dealer,  there  is  in  that  case  an 
implied  warranty  that  it  shall  be  reasonably  fit  for  the  purpose  for 
which  it  is  to  be  applied.  Benj.  Sales  (4th  Ed.)  §  657;  Jones  v.  Just, 
supra.  The  test  in  such  cases  is  whether  the  purchaser  trusts  and 
relies  upon  the  judgment  of  the  manufacturer,  and  not  upon  his  own. 
Brown  v.  Edgington,  2  Man.  &  G.  279 ;  McQuaid  v.  Ross,  85  Wis.  494, 
496,  55  N.  W.  705,  22  L,  R.  A.  187,  39  Am.  St.  Rep.  864.  This  case, 
we  think,  falls  within  the  rule  first  stated,  and  that  there  was  no  im- 
plied warranty  of  suitableness  of  the  particular  kinds  of  wheels,  with 
specified  sizes  and  dimensions,  required  by  the  plaintiff. 

2.  It  is  insisted,  however,  that  the  plaintiff  relied  upon  the  repre- 
sentations made  by  the  defendant's  agent  as  to  the  plan  or  method  of 
construction,  and,  in  particular,  the  manner  of  securing  the  spokes 
in  the  hubs  of  the  wheels ;  but  these  representations  preceded  the 
execution  of  the  written  contract,  and  the  plaintiff  took  a  limited  war- 
ranty, incorporated  in  the  written  contract,  in  respect  to  material  and 
workmanship,  going  to  and  covering  in  part  the  suitableness  of  the 
wheels  for  the  purpose  for  which  the  plaintiff  desired  them.  Where 
an  article  is  sold  by  a  formal  written  contract,  which  is  silent  on  the 
subject  of  warranty,  no  express  or  oral  warranty  made  at  the  same 
time  or  previously  can  be  shown,  nor  can  any  additional  oral  war- 
ranty be  ingrafted  upon  or  added  to  one  that  is  written,  as  the  writ- 
ten instrument  is  conclusively  presumed  to  embody  the  entire  contract. 
Merriam  v.  Field,  24  Wis.  640;  McQuaid  v.  Ross,  77  Wis.  470,  46  N. 
W.  892;  De  Witt  v.  Berry,  134  U.  S.  312,  10  Sup.  Ct.  536,  33  L. 
Ed.  896.  The  rule  on  this  subject  is  too  firmly  settled  to  require  dis- 
cussion, or  the  citation  of  other  authorities.  Evidence  to  show  an  ex- 
press oral  warranty  of  the  wheels,  made  previous  to  the  written  con- 
tract, was  therefore  clearly  incompetent. 

3.  The  contention  of  the  plaintiff  that  it  was  not  precluded  by  the 
warranties  in  the  written  contract  from  insisting  upon  an  implied  war- 
ranty that  the  wheels  should  be  suitable  for  the  purposes  for  which 
they  were  required,  for  reasons  in  addition  to  those  already  stated, 
cannot,  we  think,  be  sustained.  The  fact  that  the  limited  warranties 
going  to  the  question  of  suitableness  of  the  wheels  were  expressed  in 
the  contract,  by  the  strongest  implication,  excludes  and  negatives  the 
idea  that  it  was  intended  that  other  or  more  comprehensive  warranties 


WARRANTIES  175 

should  exist,  and  repels  any  implication  of  law  to  that  effect.  The 
contract,  as  written,  must  be  taken  as  the  final  and  conclusive  evidence 
of  all  that  was  intended  or  agreed  upon.  The  familiar  rule,  "Expres- 
sio  unius  est  exclusio  alterius,"  clearly  applies.  The  demand  of  the 
purchaser  for  certain  specified  warranties  indicates  that  no  others 
were  intended  or  expected.  Had  the  parties  intended  that  there  should 
be  an  implied  warranty,  there  was  no  occasion  to  make  any  stipulation 
on  the  subject.  The  one  introduced  must  be  taken  as  covering  the  en- 
tire subject;  otherwise  it  would  be  idle  and  unmeaning.  Adjudicated 
cases  on  this  point  are  numerous  and  conclusive. 

We  have  not  been  referred  to  any  decision  expressly  on  the  point 
to  the  contrary.  Dickson  v.  Zizinia,  10  C.  B.  602 ;  Chanter  v.  Hop- 
kins, 4  Mees.  &  W.  399;  Baldwin  v.  Van  Deusen,  37  N.  Y.  487;  De 
Witt  v.  Berry,  134  U.  S.  313,  10  Sup.  Ct.  536,  33  L.  Ed.  896;  Carle- 
ton  v.  Lombard,  Ayres  &  Co.,  72  Hun,  254,  25  N.  Y.  Supp.  570,  575 ; 
Whitmore  v.  Iron  Co.,  2  Allen  (Mass.)  58;  Deming  v.  Foster,  42  N. 
H.  165;  Budd  v.  Fairmaner,  8  Bing.  52;  Shepherd  v.  Gilroy,  46 
Iowa,  193.  The  case  of  Merriam  v.  Field,  24  Wis.  640,  was  relied  on 
as  establishing  a  contrary  view.  In  that  case  there  was  an  express 
warranty  of  title  in  the  bill  of  sale,  but  it  was  held  that  facts  might 
be  shown  from  which  an  implied  warranty  of  quality  would  arise. 
Between  these  two  subjects  there  was  no  dependent  connection,  but 
each  stood  by  itself.  There  was  not,  as  in  this  case,  any  qualified  or 
restricted  warranty  upon  the  question  of  quality  or  suitableness,  and 
the  case  was  ruled  on  the  authority  of  Bigge  v.  Parkinson,  7  Hurl. 
&  N.  955,  where  the  warranty,  as  in  Merriam  v.  Field,  was  on  a  sep- 
arate and  independent  subject,  namely,  that  the  goods  would  pass  in- 
spection, and  it  was  held  that  an  express  written  warranty  on  that 
.subject  would  not  preclude  an  implied  one  that  the  goods  were  in  fact 
fit  for  the  purpose  intended.  The  case  of  Boothby  v.  Scales,  27  Wis. 
626,  was  also  referred  to,  but  in  this  case  there  was  no  express  war- 
ranty by  written  contract,  and  it  was  held  that  an  implied  warranty 
of  suitableness  might  exist,  although  a  handbill  had  been  delivered  at 
the  time  <>f  the  and  the  agent  of  the  vendor  affirmed   of  the 

fanning  mill  that  it  possessed  the  capacities  therein  set  forth.     There 
was  no  written  warranty  on  any  subject,  and  the  particular  point  liti 
that  the  agent  making  the  oral  affirmation  had  no  authorit} 
to   .-.arrant  the  mill.     Tin.-  case,  therefore,  is  no  authority  upon 
;■  c<  n  ideral  ion. 

|y  stated,  iIh-  plaintiff  having  specified  the  sizes  and  dim 
siori  materials  of  the  particular  plan  or  kind  of  wheel  it  desi 

and  having  lo  over  and  examined  wheels  of  thai  kind. 

ired  by  the  vendor,  which  had  been  tested  in  their  pi 
as  io  their  quality  and  h,  the  conclusion  seems  in  ile  that, 

subject  to  i  in  material  and  wo  i  hip,  the  case  falls  within 

that  of  Boiler  Co.  v.  Duncan,  87  Wis.  122,  .r::  V  W.  232,  11  Vm.  St. 
Rep.  33,  and  tin'  plaint  ill'  mn  t  he  In  Id  to  have  obtained  thai  for  which 


176  CONDITIONS    AND    WARRANTIES 

it  contracted,  subject  to  such  remedy  as  it  may  be  entitled  to  on  the 
warranties  against  defective  material  and  workmanship;  and,  in  this 
connection,  it  is  proper  to  observe  that  a  defect  in  the  plan  of  the 
wheels  is  not  a  defect  of  workmanship,  for  workmanship  has  only 
to  do  with  the  execution  of  the  plan,  and  it  follows  that  the  objection 
much  relied  on,  that  the  plan  for  the  wheels  was  defective  and  imprac- 
ticable, is  not  covered  by  the  written  warranties.  The  plan  relates  to 
the  question  of  suitableness  of  the  wheels  for  the  purpose  for  which 
they  were  purchased,  in  relation  to  which,  for  reasons  already  stated, 
we  hold  that  there  was  no  implied  warranty.  *  *  *  Reversed  on 
each  appeal. 


CARLETON  v.  LOMBARD,  AYRES  &  CO. 

(Court  of  Appeals  of  New  York,  1S96.     149  N.  Y.  137,  43  N.  E.  422.) 

Action  by  T.  Osgood  Carleton  and  another  against  Lombard,  Ay- 
ers  &  Co.,  a  corporation,  for  alleged  breach  of  contract  to  deliver 
plaintiff's  a  specified  quality  and  quantity  of  petroleum.  From  a  judg- 
ment of  the  general  term,  first  department  (28  N.  Y.  Supp.  1107)  af- 
firming a  judgment  for  defendant,  plaintiffs  appeal. 

O'Brien,  J.5  The  plaintiffs  sought  to  recover  damages  in  this 
action  for  the  breach  of  an  executory  contract  for  the  sale  of  goods. 
The  defendant  is  a  domestic  corporation  engaged  in  refining  crude 
petroleum  for  sale  and  export,  and  both  parties  to  the  action  were 
members  of  the  New  York  Produce  Exchange.  On  the  10th  of  Jan- 
uary, 1887,  the  parties  entered  into  a  contract  in  writing,  which,  by 
its  terms,  was  made  subject  to  the  rules  of  the  exchange,  whereby 
the  defendant  agreed  to  sell  and  deliver  to  the  plaintiffs  a  large  quan- 
tity of  refined  petroleum.  The  following  is  the  material  part  of  the 
contract,  in  which  the  kind,  quantity,  and  price  of  the  goods  are  spec- 
ified, as  also  the  time  and  place  of  delivery,  in  these  words :  "Fifty- 
five  thousand  cases,  ten  per  cent.,  more  or  less,  each  case  packed  with 
two  of  their  patent  cans,  with  low  screw  tops  or  nozzles  and  brass 
labels,  containing  five  gallons  each  of  refined  petroleum  of  their  Stella 
brand,  color  standard  white  or  better,  fire  test  76  degrees  Abel  or 
upwards,  at  eight  and  one-half  cents  per  gallon,  cash  on  delivery.  To 
be  delivered  in  yard,  free  of  expense  to  vessel ;  to  be  ready  not  earlier 
than  the  twenty-fifth  January,  1887,  not  later  than  the  tenth  of  Feb- 
ruary, 1887,  with  twenty-five  days  to  load.  Brass  labels  one-half  of 
one  cent  each." 

It  appears  that  before  closing  this  contract  the  plaintiffs  had  re- 
ceived from  the  firm  of  Graham  &  Co.,  merchants  at  Calcutta,  British 
India,  an  offer  to  purchase  a  like  amount  of  refined  petroleum  of  the 
same  brand,  color,  test,  and  packing,  to  be  shipped  at  the  port  of  New 

«  Tart  of  the  opinion  is  omitted. 


WARRANTIES  177 

York,  not  later  than  March  15,  1887,  for  their  account  and  risk,  on 
board  the  British  ship  Corby,  bound  for  Calcutta.  This  offer  the  plain- 
tiffs accepted  on  the  same  day  that  they  entered  into  the  contract  with 
the  defendant,  and  immediately  after  closing  it.  On  or  before  March 
1,  1887,  the  defendant  delivered  the  oil,  packed  in  the  manner  speci- 
fied in  the  contract,  to  the  plaintiffs,  alongside  the  Corby,  at  its  fac- 
tory at  Bayonne.  The  delivery  by  the  defendant  to  the  plaintiffs,  and 
by  the  plaintiffs  to  their  vendees  in  Calcutta,  was  thus  accomplished 
by  substantially  the  same  act.  The  rules  of  the  Produce  Exchange, 
which  were  made  part  of  the  contract  between  the  plaintiffs  and  the 
defendant,  so  far  as  material  to  the  questions  involved,  were  these: 
(1)  The  committee  on  petroleum  were  authorized  and  required  to  license 
duly  qualified  inspectors,  members  of  the  exchange,  for  the  various 
branches  of  that  business.  (2)  Buyers  should  have  the  right  of  naming 
the  inspector,  but  must  do  so  at  least  five  days  before  the  maturity  of 
the  contract.  Failing  in  this,  the  seller  might  employ  any  regular 
inspector  at  the  buyer's  expense,  and  his  certificate  that  the  oil  is  in 
conformity  with  the  contract  shall  be  accepted.  (3)  When  goods  are 
delivered  to  vessel  by  buyer's  orders,  the  acceptance  of  them  by  buyer's 
inspector  shall  be  an  acknowledgment  that  the  goods  are  in  accord- 
ance with  the  contract. 

The  plaintiffs,  under  the  rule,  named  the  inspector,  who  on  March 
1,  1887,  after  the  cargo  was  loaded  on  board  the  Corby,  made  and 
delivered  to  them  a  certificate  in  writing  which  certified  that  he  had 
inspected  the  oil  shipped  on  board  the  Corby,  and  stated  therein  the 
brand,  color,  test,  and  gravity  of  the  same,  which  corresponded  with 
the  contract.  The  vessel  started  upon  her  voyage.  The  plaintiffs  paid 
the  defendant  the  purchase  price  of  the  oil,  and  then  drew  upon  the 
parties  in  Calcutta  to  whom  they  had  sold,  for  the  price  as  between 
them,  and  their  draft  was  paid.  The  vessel  did  not  arrive  at  Calcutta 
till  some  time  in  June,  and,  when  she  began  to  discharge  the  cargo, 
it  was  found  that  the  cans  had  become  corroded  from  the  inside  by 
some  foreign  substance  in  the  oil,  and  so  perforated  that  they  did  not 
retain  their  contents.  A  large  part  of  the  oil  was  lost  by  leakage,  and 
the  whole  cargo  was  pronounced  unmerchantable,  and  finally  sold  at 
Calcutta  for  a  small  sum,  for  account  of  whom  it  might  concern.  When 
the  condition  of  the  goods  was  discovered  by  the  consignees,  during 
the  discharge  of  the  cargo  from  the  ship,  the  plaintiffs  were  notified 
by  cable  of  the  situation  and  the  condition  of  the  oil.  They  laid  these 
dispatches  before  the  defendant,  and  a  long  correspondence  by  cable 
followed,  in  which  tin-  defendanl  participated,  and  of  all  of  which 
it  had  knowledge.  The  purpose  of  it  was  to  ascertain  the  defect,  if 
any,  in  the  oil,  and  to  reai  h  ome  amicable  arrangement.  In  the  end 
all  parti  m  to  have  become  sati  fied  that  a  large  loss  had  been 

sustained,  and  the  parties  in  Calcutta,  who  had  paid  the  plaintiffs  for 
the  property,  called  up' in  them  to  make  good  their  contract.    The  plain- 

COOLKt  ''vi  -  S.u  i-      iu 


178  CONDITIONS    AND    WARRANTIES 

tiffs  in  turn  called  upon  the  defendant  to  indemnify  them  from  loss, 
and  it  then  took  the  ground  that  it  had,  in  all  respects,  performed  its 
contract,  and  was  not  liable  for  the  result.     *     *     * 

The  property  which  was  the  subject-matter  of  the  contract  between 
the  parties  was  not  in  existence  at  the  time  it  was  made,  but  was 
thereafter  to  be  produced  by  refinement  of  the  crude  material  through 
a  manufacturing  process  by  the  defendant.  It  was  therefore  a  contract 
by  a  dealer  with  a  manufacturer,  and  is  subject  to  the  rules  and  prin- 
ciples that  apply  to  executory  contracts  for  the  sale  and  delivery  of 
goods  when  the  parties  occupy  these  relations  to  each  other.  It  is  a 
conceded  fact  in  the  case  that  the  oil  delivered  by  the  defendant 
to  the  plaintiffs  alongside  the  Corby  was  of  the  kind  and  quality  de- 
scribed in  the  written  contract.  In  quantity,  brand,  color,  and  fire 
test,  it  corresponded  with  the  terms  of  the  contract.  But  it  is  claimed 
that,  while  all  this  is  true,  yet  there  was  a  latent  or  hidden  defect  in 
the  article  so  delivered,  the  result  of  improper  refinement  or  manufac- 
ture, not  discernible  upon  inspection,  which  rendered  the  oil  unmer- 
chantable, and  unfit  for  transportation  by  sea  in  a  sailing  vessel,  and 
that  this  defect  was  the  cause  of  the  loss  which  the  plaintiffs  have  sus- 
tained. 

The  most  important  question  in  the  case  is  whether  the  defendant, 
notwithstanding  its  written  contract,  is  bound  to  make  good  the  loss, 
assuming  that  it  was  caused  by  such  defect  in  the  goods.  The  general 
rule  of  the  common  law,  expressed  by  the  maxim  caveat  emptor,  is 
not  of  universal  application,  though  the  exceptions  are  quite  limited; 
and  one  of  them  is  the  case  of  a  manufacturer  who  sells  goods  of 
his  own  manufacture,  who,  it  is  said,  impliedly  warrants  that  they 
are  free  from  any  latent  defect  growing  out  of  the  process  of  manu- 
facture. The  seller  in  such  a  case  is  liable  for  any  latent  defect  aris- 
ing from  the  manner  in  which  the  article  is  manufactured,  or  from 
the  use  of  defective  materials,  the  character  of  which  he  is  shown  or 
is  presumed  to  have  knowledge  of.  This  rule,  and  the  reasons  upon 
which  it  rests,  or  its  qualifications  and  limitations,  have  seldom  been 
stated  in  the  same  form  by  courts,  and  writers  upon  the  subject;  but 
that  it  exists,  as  a  principle  in  the  law  of  contracts,  cannot  be  doubted. 
The  leading  case  in  this  state  is  Hoe  v.  Sanborn,  21  N.  Y.  552,  78  Am. 
Dec.  163.  The  learned  judge  who  framed  the  opinion  in  that  case, 
after  stating  the  rule,  proceeds  to  show  the  grounds  upon  which  it 
rests.  In  his  view,  while  this  peculiar  obligation  is  called  a  "warranty," 
for  convenience,  it  does  not  rest  upon  any  supposed  intention  of  the 
parties  or  agreement,  in  fact,  but  is  one  which  the  law  raises  upon  prin- 
ciples foreign  to  the  contract,  in  the  interest  of  commercial  honesty 
and  fair  dealing,  and  analogous  to  those  upon  which  vendors  are  held 
liable  for  fraud. 

It  is  quite  difficult  to  reconcile  the  authorities  upon  the  question,  but 
it  may  be  observed  that  they  recognize  the  principle  that  in  such  cases 
the  seller  and  buyer  do  not  deal  with  each  other  quite  at  arm's  length ; 


WARRANTIES  179 

that  the  seller  possesses  superior  knowledge  on  the  subject,  upon  which 
the  buyer  is  presumed  to  repose  some  degree  of  confidence;  and  that 
commercial  honesty  and  fair  dealing  require  that  in  such  cases  the 
seller  be  held  bound  to  deliver  the  article  free  from  secret  or  latent 
defects  which  are  actually  or  presumptively  within  his  knowledge. 
The  principle  was  applied,  in  a  later  case  in  this  court,  to  a  contract 
for  the  sale  of  seeds  of  a  particular  description  by  the  grower.  It 
was  there  said  that,  as  the  grower  of  seeds  must  be  presumed  to  be 
cognizant  of  any  omission  or  negligence  in  cultivation  whereby  they 
were  rendered  unfit  for  use,  there  was  the  same  reason  for  implying 
a  warranty  that  they  were  not  defective  from  improper  cultivation, 
as,  in  the  case  of  a  sale  of  an  article  by  a  manufacturer,  that  it  is 
free  from  latent  defects.  White  v.  Miller,  71  N.  Y.  118,  27  Am. 
Rep.  13. 

The  latest  case  that  I  have  been  able  to  find  upon  the  question  is 
Bridge  Co.  v.  Hamilton,  110  U.  S.  108,  3  Sup.  Ct.  537,  28  L.  Ed.  86. 
The  leading  cases  bearing  upon  the  point,  both  in  this  country  and 
England,  are  there  reviewed,  and  the  court  stated  the  principle  in 
these  words :  "When  the  seller  is  the  maker  or  manufacturer  of  the 
thing  sold,  the  fair  presumption  is  that  he  understood  the  process  of 
its  manufacture,  and  was  cognizant  of  any  latent  defect  caused  by  such 
process,  and  against  which  reasonable  diligence  might  have  guarded. 
This  presumption  is  justified  in  part  by  the  fact  that  the  manufac- 
turer or  maker,  by  his  occupation,  holds  himself  out  as  competent  to 
make  articles  reasonably  adapted  to  the  purpose  for  which  such  or 
similar  articles  are  designed.  When,  therefore,  the  buyer  has  no  op- 
portunity to  inspect  the  article,  or  when,  from  the  situation,  inspec- 
tion is  impracticable  or  useless,  it  is  unreasonable  to  suppose  that  he 
bought  on  his  own  judgment,  or  that  he  did  not  rely  on  the  judgment 
of  the  seller  as  to  latent  defects,  of  which  the  latter,  if  he  used  due 
care,  must  have  been  informed  during  the  process  of  manufacture. 
If  the  buyer  relied,  and,  under  the  circumstances,  had  reason  to  rely, 
on  the  judgment  of  the  seller,  who  was  the  manufacturer  and  mal 
of  the  article,  the  law  implies  a  warranty  that  it  is  reasonably  lit  for 
the  use  for  which  it  was  designed,  the  seller  at  the  time  being  in  fun 
of  the  purpose  to  devote  it  to  that  use." 

The   principle  is  distinctly  admitted   in  the  opinion  of  the  learn<  I 
court  below,  and  I  do  not  understand  that  it  is  denied  by  the  lean 
counsel   for  the  defendant.    It  is  strenuously  urged,  however,  that  it 
can  have  no  application  to  a  case  like  this,  where  the  contracl   is  in 
writing,  with  such  ample  d<  on  of  the  goods  sold.     But  the  obli 

attached  to  an  utory  contracl  for  the  sale  of  goods  by  the 

manufacl  nol  he  changed  by  the  mere  fad  thai  the 

tract  has  been  reduced  to  writing.    The  writing,  it  is  true,  is  deemed 
to  i  the  v.1  tnenl  of  the  parties,  bul  since  this  peculiar 

liability  arises  from  the  nature  of  the  transaction  and  the  relations 

of  the  ]  ,  without  express  wool     .,r  even  actual   intention,  it  will 


ISO  CONDITIONS    AND    WARRANTIES 

remain  as  part  of  the  seller's  obligation,  unless  in  some  way  expressly 
excluded.  All  implied  warranties,  therefore,  from  their  nature,  may 
attach  to  a  written  as  well  as  an  unwritten  contract  of  sale.  The  par- 
ties may,  of  course,  so  contract  with  each  other  as  to  eliminate  this 
obligation  from  the  transaction  entirely.  The  seller  may,  by  express 
and  unequivocal  words,  exclude  it,  and,  in  like  manner,  the  buyer  may 
waive  it.  So,  also,  the  parties  may  provide  for  a  delivery  or  inspec- 
tion of  the  article  when  made,  which  will  operate  to  extinguish  the 
liability  upon  acceptance.  McParlin  v.  Boynton,  8  Hun,  449,  and  71 
N.  Y.  604.  In  this  case  the  parties  did  provide  for  an  inspection  of 
the  oil.  The  scope  and  effect  of  that  provision  of  the  contract  will 
be  considered  hereafter,  but,  aside  from  that,  there  was  no  language 
.  used  indicating  any  intention  on  the  part  of  the  buyer  to  waive,  or 
the  seller  to  exclude,  the  liability  of  a  manufacturer. 

The  proposition  upon  which  the  case  turned  in  the  court  below,  and 
upon  which  the  judgment  is  defended  here,  was  thus  stated  by  the 
learned  judge  in  the  opinion  at  general  term :  "It  is  well  settled  that, 
when  an  article  is  sold  under  a  contract  which  specifies  the  qualities 
which  it  shall  possess, — no  matter  whether  the  language  be  a  condition 
or  a  warranty, — the  law  will  not,  except  in  special  cases,  imply  a  war- 
ranty or  condition  that  the  article  has  other  qualities.  A  warranty  or 
condition,  in  a  contract  of  sale,  that  the  article  sold  has  certain  qual- 
ities, excludes  the  implication  of  a  warranty  or  condition  that  it  pos- 
sesses other  qualities."  From  the  operation  of  this  general  proposition, 
it  will  be  seen  that  the  learned  judge  excepts  special  cases,  which, 
however,  are  not  designated.  In  its  application  to  this  case  the  rule 
thus  stated  must  mean  that  since  the  parties  have,  in  their  contract, 
specified  the  particular  brand,  color,  and  fire  test  of  the  refined  pe- 
troleum which  was  the  subject  of  the  sale,  the  manufacturer's  obliga- 
tion to  deliver  an  article  free  from  latent  defects,  arising  from  the 
process  of  manufacture,  which  would  render  it  unmerchantable,  has 
been  excluded  by  implication.  This  is  not,  we  think,  the  meaning  of 
the  rule  to  which  the  learned  judge  referred  in  the  language  quoted. 
The  rule  means  that,  where  parties  to  a  contract  of  sale  have  expressed 
in  words  the  warranty  by  which  they  intend  to  be  bound,  no  further 
warranty  will  be  implied  by  law,  but  that  expressed  will  include  the 
whole  obligation  of  the  seller.  Benj.  Sales,  §  666;  Deming  v.  Foster, 
42  N.  H.  165. 

Moreover,  this  principle  applies  to  sales  of  specific,  existing  chattels, 
and  not  ordinarily  to  sales  of  goods  to  be  made  or  supplied  upon  the 
order  of  the  buyer.  There  is  much  confusion  in  the  cases  on  this 
subject,  arising,  doubtless,  from  an  inaccurate  use  of  the  term  "war- 
ranty." When  an  article  is  sold  by  the  owner  or  maker  by  the  par- 
ticular description  by  which  it  is  known  in  the  trade,  it  is  a  condi- 
tion precedent  to  his  right  of  action  that  the  thing  which  he  has  de- 
livered, or  offers  to  deliver,  should  answer  this  description.  But  in 
many  cases  in  modern  times  the  sale  of  a  particular  thing  by  terms  of 


WARRANTIES  181 

description  has  been  treated  as  a  warranty,  and  the  breach  of  such  a 
contract  a  breach  of  warranty,  whereas  it  would  be  more  correct  to  say 
that  it  was  a  failure  to  comply  with  the  contract  of  sale  which  the  party 
had  engaged  to  perform.  Chanter  v.  Hopkins,  4  Mees.  &  W.  404 ; 
Eenj.  Sales,  §  600.  There  are  many  cases  in  which  such  words  of 
description  are  not  considered  as  warranties  at  all,  but  conditions 
precedent  to  any  obligation  on  the  part  of  the  vendee,  since  the  ex- 
istence of  the  qualities  indicated  by  the  descriptive  words,  being  part 
of  the  description  of  the  thing  sold,  becomes  essential  to  its  identity, 
and  the  vendee  cannot  be  obliged  to  receive  and  pay  for  a  thing  dif- 
ferent from  that  for  which  he  contracted.  2  Smith,  Lead.  Cas.  (6th 
Eng.  Ed.)  27;  2  Schouler,  Pers.  Prop.  pp.  352,  353.  The  tendency 
of  the  recent  decisions  in  this  court  is  to  treat  such  words  as  part  of 
the  contract  of  sale  descriptive  of  the  article  sold  and  to  be  delivered 
in  the  future,  and  not  as  constituting  that  collateral  obligation  which 
sometimes  accompanies  a  contract  of  sale,  and  known  as  a  "war- 
ranty." Reed  v.  Randall,  29  N.  Y.  358,  86  Am.  Dec.  305 ;  Iron  Co. 
v.  Pope,  10S  N.  Y.  232,  236,  15  N.  E.  335. 

It  is  not  now  important  to  inquire  how  far,  or  under  what  circum- 
stances, the  principle  stated  by  the  learned  judge  applies  to  contracts 
of  sale  of  goods  in  esse  between  dealers,  in  which  there  is  an  express 
warranty.  It  is  not,  we  think,  applicable  to  the  obligation  of  a  man- 
ufacturer who  contracts,  as  in  this  case,  for  a  sale  of  his  own  product, 
the  condition  of  which  he  is  presumed  to  know.  It  is  plain  that  in 
the  case  at  bar  the  plaintiffs  intended  to  buy,  and  the  defendant  to 
sell,  an  article  of  refined  petroleum,  which  should  not  only  correspond 
to  the  description  in  the  contract,  but  should  be  free  from  latent  de- 
fects arising  from  the  process  of  manufacture,  so  as  to  constitute  a 
thing  which,  in  the  commercial  sense,  would  be  of  some  use  or  value. 
It  is  quite  conceivable  that  the  oil  might  correspond  with  all  the  de- 
scriptions of  the  contract,  and  yet  be  a  useless  and  unmerchantable 
thing,  in  consequence  of  defects  arising  from  the  process  of  manu- 
facture, in  which  case  the  buyer  would  have  the  shadow  of  the  thing 
bought,  without  the  substance.  The  defendant's  obligation  rests,  not 
only  upon  the  terms  of  the  contract,  but  upon  its  superior  knowh 
and  the  confidence  which  the  buyer  placed  in  its  ability  to  produce  a 
proper  article;  and  hence  the  relations  of  the  parties  are  quite  differ- 
ent from  that  of  dealers  in  the  article  in  the  market,  each  possessing 
equal  means  of  information  and  opportunity  for  the  detection  of  latent 
ects.    A  strict  adherence  to  the  h  e  words  of  the  i 

t  would  not  expre     the  full  obligation  of  tl  ndant.    Thai  the 

modity  shall  he  so  free  from  latent  defects  arising  from  the  pro- 
cess of  refining,  and  which  could  be  guarded  against  by  ordinary  care. 
so  as  to  render  it  merchantable,  LS  a  term  to  he  implied  in  all  sin  h 
com  Story,  Cont.  (4th  Ed.)  §§  836,  837;   Jones  v.   |n  t,  J,.   K 

3  Q.  I;.  197. 


1S2  CONDITIONS    AND    WARRANTIES 

The  plaintiffs  were  entitled  to  something  more  than  the  mere  sem- 
blance or  shadow  of  the  thing  designated  in  the  contract.  They  were 
entitled  to  the  thing  itself,  with  all  the  essential  qualities  that  rendered 
it  valuable  as  an  article  of  commerce,  and  free  from  such  latent  de- 
fects as  would  render  it  unmerchantable.  Mody  v.  Grcgson,  L.  R. 
4  Exch.  49.  If  the  goods  in  question  were  in  fact  unmerchantable, 
in  consequence  of  latent  defects  arising  from  the  process  of  manufac- 
ture, and  which  the  defendant  could  have  guarded  against  by  the  exer- 
cise of  reasonable  care,  it  would  be  quite  unreasonable  to  hold  that 
the  defendant  has,  nevertheless,  performed  the  contract,  because  it 
has  delivered  oil  of  the  same  brand,  color,  and  test  specified.  It  is 
quite  clear  that  the  words  of  the  written  contract  do  not  exclude  a 
liability  on  the  part  of  the  defendant  for  fraud  in  the  performance, 
and  it  is  difficult  to  see  how  it  can  affect  an  obligation  of  the  seller, 
who  is  also  a  manufacturer,  which  is  based  upon  his  actual  or  pre- 
sumed knowledge  of  latent  defects  in  the  oil,  arising  from  the  process 
of  refinement. 

In  the  construction  of  commercial  contracts  for  the  sale  and  delivery 
of  goods,  the  courts  are  not  always  bound  by  the  literal  meaning  of 
words  descriptive  of  the  article,  contained  in  the  contract.  It  fre- 
quently happens,  in  large  transactions,  that  the  article  which  is  the 
subject  of  the  contract  is  described  by  some  vague,  generic  word,  which, 
taken  strictly  and  literally,  may  be  satisfied  by  a  worthless  or  defec- 
tive article.  In  such  cases  the  words  may  mean  more  than  their  bare 
definition  or  literal  meaning  would  imply,  and  impose  upon  the  seller 
an  obligation  to  furnish,  not  only  the  thing  mentioned  in  the  contract, 
but  a  merchantable  article  of  that  name.  Murchie  v.  Cornell,  155  Mass. 
60,  29  N.  E.  207,  14  L.  R.  A.  492,  31  Am.  St.  Rep.  526.  If  it  be 
true  that  the  defendant  in  this  case  delivered  alongside  the  vessel  an 
article  which  was  unmerchantable  and  unfit  for  transportation,  in  con- 
sequence of  hidden  latent  defects  arising  from  the  process  of  man- 
ufacture, and  of  which  it  had,  or  should  have  had,  knowledge,  in  the 
exercise  of  reasonable  care,  it  has  not,  in  any  just  or  substantial  sense, 
performed  its  contract,  although  the  article  so  delivered  was  of  the 
brand,  color,  test,  and  specific  gravity  called  for  by  the  writing.  The 
plaintiffs  were  not  only  entitled  to  the  thing  described,  but  to  that 
thing  in  such  condition,  and  so  free  from  hidden  defects,  as  to  make 
it  available  to  them  as  an  article  of  commerce,  and  fit  for  transporta- 
tion. 

Whether  this  liability  survived  the  delivery  and  inspection  of  the 
goods  remains  to  be  considered.  When  the  rules  of  the  exchange  are 
read  into  the  contract,  it  is  provided  that  the  acceptance  of  the  pe- 
troleum by  the  buyer's  inspector  shall  be  an  acknowledgment  that  the 
goods  are  in  accordance  with  the  contract ;  and,  as  we  have  seen,  the 
inspector  so  certified.  The  inspector  was  not  the  agent  of  either  party, 
but  an  umpire  selected  to  determine  whether  the  article  delivered  along- 
side the  Corby  corresponded  with  the  contract.    The  parties,  in  effect, 


WARRANTIES  183 

submitted  a  certain  question  to  the  decision  of  the  inspector,  and  that 
was  whether  the  oil  corresponded,  in  brand,  color,  and  fire  test,  with 
the  contract.  He  was  not  authorized  to  determine  whether  there  was 
or  was  not  any  hidden  or  latent  defects  in  the  article  at  the  time  and 
place  of  the  delivery  which  would  render  it  unmerchantable.  That 
question  was  not  within  the  fair  scope  or  purpose  of  the  inspection, 
and  the  certificate  on  this  point  does  not  conclude  the  parties.  If,  how- 
ever, the  defects  which  the  plaintiffs  now  claim  existed  at  the  time  of 
delivery,  and  which  they  claim  to  have  produced  the  damages,  were 
discernible  upon  the  inspection  contemplated  by  the  contract,  they 
were  not  hidden  or  latent  defects,  within  the  meaning  of  the  rule,  and 
in  that  case  the  certificate  would  conclude  the  parties.  If,  in  execut- 
ing the  power  to  determine  the  brand,  color,  fire  test,  and  gravity  of 
the  article  delivered,  any  other  defect  which  would  render  it  unmer- 
chantable would  necessarily  appear,  the  plaintiffs  are  concluded  as  to 
that  defect  by  the  certificate  of  the  inspector.  Studer  v.  Bleistein,  115 
N.  Y.  316,  22  N.  E.  243,  5  L.  R.  A.  702;  Pan  Co.  v.  Remington,  41 
Hun,  218. 

If  I  am  right  in  these  several  propositions,  it  must  follow  that  the 
plaintiffs  were  entitled  to  prove  upon  the  trial,  if  they  could,  that  the 
refined  petroleum  delivered  by  the  defendant  alongside  the  Corby, 
though  corresponding  with  the  description  of  the  article  in  the  con- 
tract, had  in  it  some  hidden  or  latent  defect,  not  discernible  by  the 
inspection  provided  for,  which  then  and  there  rendered  it  unmerchant- 
able.    *     *     *     Reversed. 


BLACKMORE  v.  FAIRBANKS,  MORSE  &  CO. 
(Supreme  Court  of  Iowa.  L890.     79  Iowa,  282,  44  N.  W.  548.) 

Action  to  recover  damages  alleged  to  have  been  sustained  by  rea- 
son of  breach  of  warranty  in  the  sale  of  machinery.  There  was  a 
trial  by  jury,  and  a  verdict  and  judgment  for  plaintiff.  The  de- 
fendant appeals. 

ROBINSON,  J.°  The  agreement  under  which  the  machinery  in 
controversy  was  sold  was  in  writing,  and  in  the  form  of  an  order. 
The  portions  material  to  a  determination  of  the  questions  raised  on 
this  appeal  arc  as  follows:  "Messrs.  Fairbanks,  Morse  &  Co.,  Chi- 
■  :  Plea  e  furnish  me  at  once  the  following-named  goods :  *  *  * 
One  25  II.  P.  Standard  Westinghouse  engine;  one  30  II.  P.  boiler, 
with  fixtures  complete,  and  machines  as  follows:  One  steam  pump, 
with  sufficient  capacity  to  supply  boiler  and  heater  with  water  tal 
from  the  well;  *  *  *  one  Still \\ <  11  heater  and  connections  com 
plete.  *  *  *  This  order  is  for  the  engine  and  boiler  at  Lester- 
ville,  I).  T.,  with  fixtures  complete,  excepl  inspirator  and  heater;  tho 
latter  to  be  replaced  with  the  Stillwell  heater.    Said  outfit  to  be  in 

Part  of  the  opinion  la  omitted. 


184  CONDITIONS    AND    WARRANTIES 

good  order,  except  from  exposure  to  weather  at  Lesterville,  which 
has  not  damaged  the  real  merits  of  the  machinery."  The  machin- 
ery specified  in  the  agreement  was  delivered  to  plaintiff. 

The  petition  alleges  that  the  machinery  was  "warranted  to  be  suffi- 
cient to  furnish  the  motive  power  for  the  Aplington  Grist  &  Flouring 
Mills,  and  be  sound,  and  do  good  work,  as  specified  in  said  warranty. 
*  *  *  That  on  a  specified  test  thereof,  said  engine,  machinery, 
and  appliances  sold  by  defendant  to  plaintiff  proved  defective  and 
insufficient,  in  this :  that  it  throws  crank  case  oil  into  the  heater 
and  boiler,  so  as  to  render  it  dangerous,  insufficient,  and  entails  great 
expense  in  its  operation,  and  is  insufficient  to  furnish  the  motive 
power  for  plaintiff's  said  mill."  The  answer  denies  the  alleged  war- 
ranty, denies  the  alleged  defects  in  the  machinery,  and  avers  that  the 
cause  of  the  throwing  of  crank  case  oil  into  the  heater  and  boiler 
was  the  use  by  plaintiff  of  an  open  heater,  without  an  oil  extrac- 
tor.    *     *     * 

Appellant  complains  of  the  refusal  of  the  court  to  give  certain 
instructions  asked  by  it,  and  of  the  giving  of  a  portion  of  the  charge 
on  the  same  subject,  which  is  as  follows :  "Under  this  contract, 
it  was  the  duty  of  the  defendant  to  furnish  to  the  plaintiff  an  engine 
of  the  kind  described,  of  twenty-five  horse  power,  and  all  other  ma- 
chinery and  appliances  specified  in  the  contract,  in  good  condition, 
and  fit  for  use,  except  as  damaged  by  exposure  to  the  weather  at 
Lesterville,  Dak. ;  and  if  the  defendant  failed  and  refused  to  furnish 
the  plaintiff  the  said  machinery  in  the  condition  specified,  it  would 
be  liable  to  the  plaintiff  for  damages  in  such  sum  as  you  may  find 
from  the  evidence,  and  under  the  instructions,  he  has  suffered."  Ap- 
pellant contends  that  its  contract  would  have  been  fully  complied 
with,  had  it  delivered  to  plaintiff  a  Standard  Westinghouse  engine 
in  the  condition  in  which  .such  engines  are  turned  Out  at  the  factory, 
whereas  the  instruction  given  required  defendant  to  deliver  a  West- 
inghouse engine  in  good  condition,  and  fit  for  use,  except  as  dam- 
aged by  the  weather;  or,  in  other  words,  that  the  court  construed 
the  contract  to  include  a  warranty  that  the  engine  to  be  delivered, 
not  only  had  not  suffered  injury,  except  by  the  weather,  since  it  left 
the  hands  of  the  manufacturer,  but  also  that  it  was  so  constructed 
as  to  be  fit  for  use,  and  for  the  use  plaintiff  desired  to  make  of  it. 

The  rule  in  regard  to  an  implied  warranty  of  quality  has  been 
stated  as  follows :  "So  far  as  an  ascertained  specific  chattel,  already 
existing,  and  which  the  buyer  has  inspected,  is  concerned,  the  rule 
of  caveat  emptor  admits  of  no  exception  by  implied  warranty  of 
quality.  But  where  a  chattel  is  to  be  made  or  supplied  to  the  order 
of  the  purchaser,  there  is  an  implied  warranty  that  it  is  reasonably 
fit  for  the  purpose  for  which  it  is  ordinarily  used,  or  that  it  is  fit  for 
the  special  purpose  intended  by  the  buyer,  if  that  purpose  be  com- 
municated to  the  vendor  when  the  order  is  given."  2  Benj.  Sales,  § 
966.     See,  also,  King  v.   Gottschalk,  21   Iowa,  513.     In  this  case, 


IMPLIED   WARRANTY    OF   TITLE  185 

plaintiff  had  not  inspected  the  property  ordered,  and  had  no  oppor- 
tunity to  do  so,  when  the  order  was  given.  On  the  other  hand,  de- 
fendant knew  the  use  for  which  the  property  was  intended.  There- 
fore, unless  excluded  by  the  terms  of  the  order,  there  was  an  im- 
plied warranty  that  the  property  was  fit  for  the  designed  use,  and 
that  it  was  in  merchantable  condition. 

Appellant  contends  that  the  order,  in  effect,  contains  an  express 
warranty  that  the  property  shall  be  in  good  order;  hence,  that  im- 
plied warranties  must  be  excluded.  It  is  true  that,  as  a  general  rule, 
no  warranty  will  be  implied  where  the  parties  have  expressed  in 
words  the  warranty  by  which  they  mean  to  be  bound,  (2  Benj.  Sales, 
§  1002 ;)  but  the  rule  does  not  extend  to  the  exclusion  of  warranties 
implied  by  law,  where  they  are  not  excluded  by  the  terms  of  the 
contract.  Thus,  an  express  warranty  of  title  does  not  exclude  an 
implied  warranty  of  quality.  Id.,  note  40,  and  cases  therein  cited; 
Merriam  v.  Field,  24  Wis.  640;  Boothby  v.  Scales,  27  Wis.  632;  Roe 
v.  Bacheldor,  41  Wis.  360;  Wilcox  v.  Owens,  64  Ga.  601;  10  Amer. 
&  Eng.  Cyclop.  Law,  109.  A  warranty  will  not  be  implied  in  con- 
flict with  the  expressed  terms  of  the  agreement ;  but  there  is  no  con- 
flict of  that  kind  in  this  case.  The  implied  warranty  that  the  ma- 
chinery is  fit  for  the  use  for  which  it  was  purchased  is  in  harmony 
with  the  provisions  specifying  the  power  of  the  engine  and  boiler, 
and  that  it  should  be  in  good  order,  except  from  exposure  to  the 
weather  at  Lcsterville.  WTe  think  the  instruction  in  question  was 
correct,  and  that  those  asked  by  defendant  were  properly  refused. 
This  conclusion  is  not  in  conflict  with  the  cases  relied  upon  by  ap- 
pellant, among  which  are  Warbasse  v.  Card,  74  Iowa,  306,  37  N.  W. 
383;  Mast  v.  Pearce,  58  Iowa,  579,  8  N.  W.  632,  and  12  N.  W.  597, 
43  Am.  Rep.  125 ;  and  Nichols  v.  Wyman,  71  Iowa,  160,  32  N.  W. 
258.  An  examination  of  those  cases  will  show  that  they  decided,  in 
effect,  that  the  terms  of  an  agreement  in  writing  could  not  be  varied 
or  contradicted  by  evidence  of  a  parol  contemporaneous  agreement. 

No  question  in  regard  to  warranties  implied  by  law  was  involved. 
The  judgment  of  the  district  court  is  affirmed. 


III.  Implied  Warranty  of  Title  T 


G(  >ULD  v.  B<  lURGEOIS. 

(Supreme  Court  <>t  New  J(  L889.    -",i   \.  J,  Law,  861,  18  Ail.  fit.) 

i  r.,  J.H    This  suit  was  upon  a  promissory  note  made  by  the 
defendant.     Tin-  defen  e  was  the  want  or  failure  of  consideration. 

7  i  ,r  discussion  "f  principles,    ee  Tiffany,  Sales  (2d  Ed.)  s  7<i. 

8  Part  of  tii<-  opinion  i    omitted. 


1-86  CONDITIONS    AND    WARRANTIES 

The  city  council  of  Holly  Beach  City  proposed  to  build  a  breakwater. 
The  defendant  was  an  applicant  for  a  contract  to  do  the  work,  and 
prepared  and  sent  to  the  city  council  an  agreement  with  the  city  to 
that  effect.  Members  of  the  city  council  sent  word  to  the  defendant 
that  the  city  had  already  entered  into  a  contract  for  the  building 
of  the  breakwater  with  Gould  &  Downs,  that  these  parties  could  not 
fulfill  their  contract,  and  that,  if  the  defendant  would  make  a  satis- 
factory arrangement  with  Gould  &  Downs,  the  city  would  give  him 
the  contract.  The  parties  thereupon  entered  into  negotiation,  the 
conclusion  of  which  was  a  contract  in  writing  and  under  seal,  where- 
by Gould  &  Downs,  for  the  consideration  of  a  note  for  $375  and  $500 
in  city  bonds,  assigned  to  the  defendant  "all  our  right,  title,  and  in- 
terest in  a  certain  contract  entered  into  by  the  authorities  of  Holly 
Beach  City  and  ourselves  to  build  a  certain  breakwater  ordered  built 
by  a  resolution  passed  April  14,  1887."  Subsequently,  the  city  coun- 
cil, having  obtained  the  opinion  of  counsel  that  the  city  had  no  pow- 
er to  build  the  breakwater,  refused  to  ratify  the  arrangement  of  the 
defendant  with  Gould  &  Downs,  and  abandoned  the  project  of  con- 
structing the  work.  The  note  sued  on  was  given  in  compliance  with 
the  terms  of  this  assignment.  There  was  no  proof  of  an  express 
warranty  by  Gould  &  Downs  of  the  validity  of  their  contract,  nor 
any  evidence  from  which  fraud,  either  in  representation  or  conceal- 
ment on  their  part,  could  be  inferred.  The  power  of  the  city  to  make 
the  contract  was  not  mooted  until  after  these  parties  had  concluded 
their  arrangement  and  the  assignment  had  been  made ;  and,  if  the  con- 
tract was  invalid,  its  invalidity  arose  from  the  city  charter, — a  public 
act  equally  within  the  knowledge  of  both  parties. 

The  defendant's  contention  was  that,  inasmuch  as  there  was  a  sale 
of  the  contract,  a  warranty  that  the  contract  was  a  valid  contract  was 
implied,  and  that,  the  contract  being  ultra  vires  on  the  part  of  the 
city,  and  void,  the  consideration  entirely  failed.  If  the  proposition 
on  which  the  defense  was  rested  be  sound  in  law,  the  defense  was 
appropriate  in  this  suit.  The  doctrine  of  implied  warranty  of  title 
in  the  sale  of  goods  applies  as  well  to  the  sale  of  a  chose  in  action, 
and  extends  not  merely  to  the  paper  on  which  the  chose  in  action 
is  written,  but  embraces  also  the  validity  of  the  right  purported  to  be 
transferred.  Wood  v.  Sheldon,  42  N.  J.  Law,  ^421,  36  Am.  Rep. 
523.  Nor  is  there  anything  in  the  nature  of  the  alleged  infirmity  of 
the  contract  that  would  bar  the  defense.  In  the  ordinary  case  of  a 
suit  on  a  breach  of  warranty  of  title  the  validity  of  the  vendor's  title 
against  the  adverse  claimant  is  triable,  if  the  purchaser  has  in  fact 
lost  title,  although  the  transactions  which  determine  the  vendor's 
title  are  res  inter  alios  acta.  If  the  contract  which  was  the  subject- 
matter  of  the  assignment  was  in  fact  ultra  vires,  a  foundation  was 
laid  for  this  defense,  the  city  having  repudiated  the  contract  in  limine 
on  that  ground. 


IMPLIED   WARRANTY    OF   TITLE  187 

The  validity  of  the  defense  offered  and  overruled  depends  upon  the 
fundamental  proposition  whether,  under  the  circumstances  of  this 
sale,  a  warranty  of  title  is  implied  in  law.  The  theory  on  which  a 
warranty  of  title  is  implied  upon  the  sale  of  personal  property  is  that 
the  act  of  selling  is  an  affirmation  of  title.  The  earlier  English  cas- 
es, of  which  Medina  v.  Stoughton,  1  Salk.  210,  1  Ld.  Raym.  593,  is 
a  type,  adopted  a  distinction  between  a  sale  by  a  vendor  who  was  in 
possession  and  a  sale  where  the  chattel  was  in  the  possession  of  a 
third  person;  annexing  a  warranty  of  title  to  the  former,  and  ex- 
cluding it  in  the  latter.  In  the  celebrated  case  of  Pasley  v.  Freeman. 
3  Term  R.  51,  Duller,  J.,  repudiated  this  distinction.  Speaking  of 
Medina  v.  Stoughton,  this  learned  judge  said  that  the  distinction  did 
not  appear  in  the  report  of  the  case  by  Lord  Raymond,  and  he  adds : 
"If  an  affirmation  at  the  time  of  the  sale  be  a  warranty,  I  cannot  feci 
a  distinction  between  the  vendor's  being  in  or  out  of  possession. 
The  thing  is  bought  of  him,  and  in  consequence  of  his  assertion; 
and,  if  there  be  any  difference,  it  seems  to  me  that  the  case  is  strong- 
est against  the  vendor  when1  he  is  out  of  possession,  because  then  the 
vendee  has  nothing  but  the  warranty  to  rely  on."  Nevertheless  the 
English  courts  continued  to  recognize  the  distinction,  with  its  inci- 
dents, as  adopted  in  Medina  v.  Stoughton,  to  some  extent,  at  least  so 
far  as  to  annex  the  incident  of  an  implied  warranty  of  title  on  a  salc- 
by  a  vendor  in  possession. 

Later  decisions  have  placed  the  whole  subject  of  implied  warranty 
of  title  on  a  more  reasonable  basis.  Mr.  Benjamin,  in  his  Treatise 
on  Sales,  after  a  full  examination  and  discussion  of  the  late  English 
cases,  states  the  rule  in  force  in  England  at  this  time  in  the  follow- 
ing terms :  "A  sale  of  personal  chattels  implies  an  affirmation  by 
the  vendor  that  the  chattel  is  his,  and  therefore  he  warrants  the  title, 
unless  it  be  shown  by  the  facts  and  circumstances  of  the  sale  that 
the  vendor  did  not  intend  to  assert  ownership,  but  only  to  transfer 
such  interest  as  he  might  have  in  the  chattel  sold."  2  Benj.  Sales, 
(Corbin's  Ed.)  §§  945-961.  In  this  country  the  distinction  between 
sal's  where  the  vendor  is  in  possession  and  where  he  is  out  of  pos- 
session with  respect  to  implied  warranty  of  title,  has  been  generally 

ized;  but  tin-  tendency  of  later  decisions   is  against  the  reco 
nition  of  such  a  distinction,   and    favorable   to  the   modern    English 
rule.     1<1.  §  962,  note  21;    Bid.   War.   §§  246,  217.     The  American 
editor  of  the  ninth   edition  of  Smith's  Leading  Cases,   in   the  note  to 

Chandelor  v.  Lopus,  alter  citing  the  cases  in  this  country  which  have 
held  that  the  rule  of  caveat  emptor  applies  to  sales  where  the  vendor 

:it   of  p<  ion,  remarks  that    in  most  of  them  what   was  said  on 

I1  al   ]i"iiit   was  obiter  dicta,  and  observes  "thai   there  seems  no  reason 

why,  iii  every  case  where  the  vendor  purports  to  sell  an  absolute 

and    perfect    title,    he    should    not  be    held    to    warrant    it."      1    Smith, 

Lead.  Cas.  (Edson's  Ed.)  314. 


1SS  CONDITIONS    AND    WARRANTIES 

In  Wood  v.  Sheldon,  supra,  Chief  Justice  Beasley,  in  delivering  the 
opinion  of  the  court,  adopted,  in  terms,  the  rule  stated  by  Mr.  Ben- 
jamin; and  made  it  the  foundation  of  decision.  The  precise  question 
now  under  discussion  did  not  then  arise.  In  Eichholz  v.  Bannister, 
17  C.  B.  (N.  S.)  708-721,  Erie,  C.  J.,  said:  "I  consider  it  to  be  clear 
upon  the  ancient  authorities  that,  if  the  vendor  of  a  chattel  by  word 
or  conduct  gives  the  purchaser  to  understand  that  he  is  the  owner, 
that  tacit  representation  forms  part  of  the  contract;  and  that  if  he 
is  not  the  owner  his  contract  is  broken.  *  *  *  In  almost  all  the 
transactions  of  sale  in  common  life,  the  seller,  by  the  very  act  of 
selling,  holds  out  to  the  buyer  that  he  is  the  owner  of  the  article  he 
offers  for  sale."  In  that  case  it  was  held  that  on  the  sale  of  goods  in 
an  open  shop  or  warehouse,  in  the  ordinary  course  of  business,  a  war- 
ranty of  title  was  implied ;  but  there  is  a  line  of  English  cases  hold- 
ing that,  where  the  facts  and  circumstances  show  that  the  purpose  of 
the  sale,  as  it  must  have  been  understood  by  the  parties  at  the  time, 
was  not  to  convey  an  absolute  and  indefeasible  title,  but  only  to 
transfer  the  title  or  interest  of  the  vendor,  no  warranty  of  title  will 
be  implied. 

In  this  proposition  the  fact  that  the  vendor  is  in  or  out  of  posses- 
sion is  only  a  circumstance  of  more  or  less  weight,  according  to  the 
nature  and  circumstances  of  the  particular  transaction.  Thus  in 
Morley  v.  Attenborough,  3  Exch.  500,  the  holding  was  that  on  a  sale 
by  a  pawnbroker  at  public  auction  of  goods  pledged  to  him  in  the 
way  of  business  there  was  no  implied  warranty  of  absolute  title,  the 
undertaking  of  the  vendor  being  only  that  the  subject  of  the  sale 
was  a  pledge,  and  irredeemable  by  the  pledgor.  In  Chapman  v. 
Speller,  14  Q.  B.  621,  the  defendant  bought  goods  at  a  sheriff's  sale 
for  £18.  The  plaintiff,  who  was  present  at  the  sheriff's  sale,  bought 
of  the  defendant  his  bargain  for  £23.  The  plaintiff  was  afterwards 
forced  to  give  up  the  goods  to  the  real  owner.  He  then  sued  the 
defendant,  alleging  a  warranty  of  title.  The  court  held  that  there 
was  no  implied  warranty  of  title  nor  failure  of  consideration ;  that  the 
plaintiff  paid  the  defendant,  not  for  the  goods,  but  for  the  right,  title, 
and  interest  the  latter  had-  acquired  by  his  purchase,  and  that  this 
consideration  had  not  failed.  In  Bagueley  v.  Hawley,  L.  R.  2  C. 
P.  625,  a  like  decision  was  made,  where  the  defendant  resold  to  the 
plaintiff  a  boiler  the  former  had  bought  at  a  sale  under  a  distress 
for  poor-rates,  the  plaintiff  having  knowledge  at  the  time  of  his  pur- 
chase that  the  defendant  had  bought  it  at  such  sale.  In  Hall  v.  Con- 
der,  2  C.  B.  (N.  S.)  22,  the  plaintiff,  by  an  agreement  in  writing  by 
which,  after  reciting  that  he  had  invented  a  method  of  preventing 
boiler  explosions,  and  had  obtained  a  patent  therefor  within  the  Unit- 
ed Kingdom,  transferred  to  the  defendant  "the  one-half  of  the  Eng- 
lish patent"  for  a  consideration  to  be  paid.  In  a  suit  to  recover  the 
consideration  the  defendant  pleaded  that  the  invention  was  wholly 
worthless,  and  of  no  public  utility  or  advantage  whatever,  and  that 


IMPLIED   WARRANTY   OF   TITLE  189 

the  plaintiff  was  not  the  true  and  first  inventor  thereof.  On  demur- 
rer the  plea  was  held  bad,  for  that,  in  the  absence  of  any  allegation  of 
fraud,  it  must  be  assumed  that  the  plaintiff  was  an  inventor,  and  there 
was  no  warranty,  express  or  implied,  either  that  he  was  the  true  and 
first  inventor  within  the  statute  of  James,  or  that  the  invention  was 
useful  or  new;  but  that  the  contract  was  for  the  sale  of  the  patent, 
such  as  it  was,  each  party  having  equal  means  of  ascertaining  its 
value,  and  each  acting  on  his  own  judgment.  A  like  decision  was 
made  in  Smith  v.  Xeale,  2  C.  B.  (N.  S.)  67. 

Chief  Justice  Erie,  in  his  opinion  in  Eichholz  v.  Bannister,  de- 
scribes Morley  v.  Attenborough,  Chapman  v.  Speller,  and  Hall  v. 
Conder,  as  belonging  to  the  class  of  cases  where  the  conduct  of  the 
seller  expresses,  at  the  time  of  the  contract,  that  he  merely  contracts 
to  sell  such  title  as  he  himself  has  in  the  thing.  The  opinion  is  val- 
uable, in  that,  while  it  rescues  the  common-law  rule  of  implied  war- 
ranty of  title  from  the  assaults  of  distinguished  judges  who  held  that 
caveat  emptor  applied  to  sales  in  all  cases,  and  that  in  the  absence 
of  express  warranty  or  fraud  the  purchaser  was  remediless,  it  also 
placed  the  rule  under  the  just  limitation  that  it  should  not  apply 
where  the  circumstances  showed  that  the  sale  purported  to  be  only 
a  transfer  of  the  vendor's  title.  Expressions  such  as  "if  a  man  sells 
goods  as  his  own,  and  the  title  is  deficient,  he  is  liable  to  make  good 
the  loss,"  (2  Bl.  Comm.  451),  or  "if  he  sells  it  as  his  own,  and  not  as 
agent  for  another,  and  for  a  fair  price,  he  is  understood  to  warrant 
the  title,"  (2  Kent,  Comm.  478,) — as  a  statement  of  the  principle  on 
which  the  doctrine  of  implied  warranty  of  title  rests,  is  not  incon- 
sistent with  the  principle  adopted  by  Chief  Justice  Erie.  Stating  the 
principle  in  the  negative  form  adopted  in  Morley  v.  Attenborough, 
that  there  is  no  undertaking  by  the  vendor  for  title  unless  there  be 
an  express  warranty  of  title,  or  an  equivalent  to  it  by  declaration  or 
conduct,  affects  only  the  order  of  proof.  It  was  conceded  in  that 
case  that  the  pawnbroker  selling  his  goods  undertook  that  they  had 
ii  pledged,  and  were  irredeemable  by  the  pledgor,  and  if  it  be 
imed,  as  I  think  it  must  be,  that  the  act  of  selling  amounts  to  an 
affirmation  of  title  of  some  sort,  but  that  its  force  and  effect  may  be 
lained,  qualified,  or  entirely  overcome  by  the  facts  and  circum- 
stances connected  with  the  transaction,  the  difference  between  Mor- 
ley v.  Attenborough  and  Eichholz  v.  Bannister  will  rarely  be  of  any 
practical  importance. 

The  limitation    above  mentioned   upon   the   doctrine   that   the  act 

elling  is  an  affirmation  of  title  has  been  adopted  in  this  state.     In 

Bogerl   v.  Chrystie,  24   X.  J.   Law,  57  60,  this  court. held  thai   the 

I  rule  that  the  vendor  of  goods  having  possession,  and  selling 

them  a     hi-   own,  is  bound  in   law   to  warrant    the  title  to  the   vendee. 

did  not  apply  where  the  vendor  with  notice  of  an  outstanding 

interest   in   a   third   part)',    and   subjeel    to    that   interest.      In    Mall    v. 


TJO  CONDITIONS    AND    WARRANTIES 

Hoagland,  38  N.  J.  Law,  351,  the  vendor  agreed  in  writing  to  assign 
a  lease  he  held  upon  certain  premises,  and  to  sell  and  transfer  goods 
and  chattels  mentioned  in  a  schedule.  The  premises  were  a  licensed 
inn  and  tavern,  and  in  the  schedule  of  the  articles  sold  were  enumer- 
ated "the  licenses  of  the  house."  The  law  under  which  the  license 
was  granted  prohibited  the  transfer  of  a  license,  and  in  the  purchas- 
er's hands  it  would  be  void  and  valueless.  The  court  held  that  that 
circumstance  did  not  justify  the  purchaser  in  withdrawing  from  his 
contract;  that  there  was  no  warranty  by  the  vendor  that  the  license, 
when  assigned,  would  be  of  any  value  to  the  purchaser;  and  that 
the  latter,  having  obtained  by  the  assignment  what  he  had  bargained 
for,  could  not  annul  his  contract  unless  he  showed  fraud  or  misrepre- 
sentation with  respect  to  the  subject-matter  of  the  contract. 

In  Bank  v.  Trust  Co.,  123  Mass.  330,  the  defendant  had  a  contract 
with  B.,  pledging  to  him  certain  tobacco,  in  which  it  was  recited 
that  the  tobacco  was  B.'s  own  property,  and  free  from  all  incum- 
brances, and  made  an  assignment  to  the  plaintiff  "of  all  his  right, 
title,  and  interest  in  and  under  the  contract,  with  all  the  property 
therein  mentioned."  The  tobacco  was  then  in  the  defendant's  pos- 
session, and  was  delivered  by  him  to  the  plaintiff.  Afterwards  a  third 
person  demanded  and  recovered  of  the  plaintiff  part  of  the  tobacco 
as  his  property,  which  had  been  pledged  to  the  defendant  without 
right.  The  plaintiff  then  sued  the  defendant  on  an  alleged  implied 
warranty  of  title.  The  court  ruled  adversely  to  the  plaintiff's  claim. 
In  the  opinion  the  court  said  that  the  written  assignment  did  not  pur- 
port to  be  a  sale  of  the  goods,  but  of  all  the  defendant's  right  under 
the  contract,  and  its  obvious  purpose  was  to  substitute  the  plaintiff 
in  the  place  of  the  original  pledgee,  and  that  the  fact  that  at  the  time 
of  the  transfer  to  the  plaintiff  the  goods  were  in  the  actual  posses- 
sion of  the  defendant  did  not  vary  the  case. 

In  the  case  in  hand  the  circumstances  connected  with  the  assign- 
ment, independent  of  the  words  "all  our  right,  title,  and  interest," 
etc.,  contained  in  it,  preclude  the  implication  of  a  warranty  of  the 
validity  of  the  contract.  Taken  in  connection  with  the  words  of  the 
assignment,  the  intention  of  the  parties  is  free  from  doubt.     *     *     * 


IMPLIED   WARRANTY   IN   SALE   BY   DESCRIPTION  191 


IV.  Implied  Warranty  in  Sale  by  Description 


GAGE  v.  CARPENTER. 

(Circuit  Court  of  Appeals  of  United  States,  First  Circuit,  1901.    107  Fed.  SS6, 

47  C.  C.  A.  39.) 

In  Error  to  the  Circuit  Court  of  the  United  States  for  the  District 
of  Massachusetts. 

Action  for  breach  of  warranty  of  quality  of  ice  sold  by  defendant  to 
plaintiff  in  bulk.  There  was  judgment  for  plaintiff,  and  defendant 
appeals. 

Before  Colt,  Circuit  Judge,  and  Aldrich  and  Lowell,  District 
Judges. 

Aldrich,  District  Judge.10  The  controversy  here  relates  to  a 
sale  of  ice.  According  to  the  plaintiff's  principal  contention  in  argu- 
ment before  us,  and  according  to  the  construction  most  favorable  to 
him  which  we  deem  admissible,  it  was  a  sale  of  all  the  ice  in  five  cer- 
tain ice  houses  in  Chelmsford.  *  *  *  For  the  price  fixed  the 
plaintiff  became  the  owner  by  purchase  of  all  the  ice  in  the  ice  houses. 
*  *  *  If  the  learned  trial  judge  is  to  be  taken  as  having  permitted 
the  jury,  under  the  aid  of  parol  evidence,  to  construe  the  contract  as 
a  sale  of  5,748.70  tons  of  ice  at  one  dollar  per  ton,  wc  think  he  er- 
roneously admitted  parol  evidence  to  vary  the  written  agreement.  We 
have  to  determine,  therefore,  whether,  in  a  lump  sale  of  specified  ice 
under  the  circumstances  mentioned,  there  arose  an  implied  warranty 
that  the  ice  was  of  merchantable  quality,  and  we  need  only  consider 
the  exceptions  which  raise  that  question,  for  the  reason  that  the  plain- 
tiff's right  of  recovery,  if  any,  results  from  a  warranty  of  that  char- 
acter: and,  as  we  hold  there  is  no  implied  warranty,  all  other  questions 
ome  immaterial. 

The  evidence  of  the  plaintiff  below  tended  to  show  that  a  part  of 
the  ice  in  question  turned  out,  as  it  was  opened  up,  to  be  snow  ice, 
and  therefore  unmerchantable,  and  the  plaintiff  claimed  an  implied 
warranty  that  the  same  was  merchantable.  As  has  been  said  the 
quantity  of  ice  had  been  ascertained  by  survey  at  the  time  the  con- 
tract was  •  I  to  writing  and  the  ice  paid  for;  and  therefore  the 
claim  of  warranty,  we  think,  relate  to  the  quality  of  the  mass,  rather 
than  to  the  question  whether  the  mass  was  in  part  ice  and  in  pari 
-now.  We  do  not,  as  argued  hen-  by  the  defendant  in  error,  view 
tation  shown  by  the  record  as  presenting  a  ca  e  where  the 
commodity  turned  OUt  to  he  not  the  thing  named  in  the  contract.    True. 

»  i  hi'  .ii  i  ii    i  n  of  principles,  Bee  Tiffany,  Sales  (2d  Ed.)  §  77. 
10  pari  "i  i  be  opinion  i  d. 


192  CONDITIONS    AND    WARRANTIES 

as  claimed  by  the  defendant  in  error,  the  sale  was  of  ice,  not  snow; 
but  snow  ice,  in  the  common  acceptation  of  the  term,  is  not  snow. 
Snow  ice  results  when  the  snow  melts,  and  the  snow  water,  or  slush, 
held  upon  the  surface  of  the  river  or  pond  ice,  is  frozen,  thus  forming 
an  upper  layer,  or  course,  of  ice  of  an  inferior  consistency,  weight, 
and  quality.  Consequently  it  was  all  ice,  and  the  controversy,  there- 
fore, reasonably  enough  we  think,  relates  to  the  quality  of  the  ice 
sold  rather  than  to  a  question  whether  the  vendor  sold  for  ice  a  com- 
modity which  was  not  in  fact  ice,  and  delivered  a  thing  not  named 
in  the  contract. 

It  is  somewhat  difficult  to  reconcile  the  implied  warranty  cases,  and 
state  a  general  rule,  with  all  the  limitations  and  distinctions  given  in 
the  books,  and  it  is  not  necessary  that  we  should  attempt  to  do  so.  It 
is  sufficient  for  the  purposes  of  this  case  to  determine  whether  an  im- 
plied warranty  was  created  by  the  written  contract,  construed  in  the 
light  of  the  situation  of  the  property  and  the  relations  of  the  parties 
thereto  as  shown  by  the  material  parol  evidence;  and  it  may  be  ob- 
served at  the  outset  that  the  learned  judge  who  presided  at  the  trial 
treated  the  question  as  one  of  doubt,  upon  which  he  inclined  to  the 
view  of  the  plaintiff  below. 

The  property  in  controversy  was  in  esse  and  in  bulk,  as  ice  is  usual- 
ly packed  in  large  storehouses  in  large  quantities,  and  consisted,  as 
expressed  in  the.  written  contract,  "of  all  the  ice  stored  in  my  five  ice 
houses  on  the  shore  of  Baptist  or  Hart's  pond  in  South  Chelmsford." 
The  buyer  met  the  seller  at  South  Chelmsford,  and  looked  over  the 
property  in  the  situation  described  before  the  contract  of  sale  was 
completed,  and  it  was  bought,  as  the  seller  understood,  to  be  sold 
again  in  the  usual  course  of  a  general  ice  business  in  Providence.  The 
ice  was  not  harvested,  packed,  or  stored  by  the  seller,  and  at  time  of 
sale  was  so  situated  that  it  could  not  be  inspected.  For  this  reason  the 
seller  had  had  no  opportunity  of  inspecting  or  determining  the  quality 
or  condition  of  the  ice  beyond  that  of  the  buyer,  and  the  buyer  was 
informed  that  the  seller  had  purchased  it  of  the  Lowell  Ice  Company, 
that  he  had  never  made  any  personal  examination  as  to  the  quality 
or  condition,  and  that  all  the  information  he  had  about  it  was  derived 
from  the  persons  of  whom  he  purchased. 

We  do  not  think  the  law  implies  a  warranty  of  quality  under  such 
circumstances.  It  does  not  stand  like  a  case  where  the  seller  was 
silent  as  to  his  information  or  lack  of  information.  It  was  equivalent 
to  saying  to  the  buyer:  "You  have  all  the  information  and  all  the 
opportunities  for  information  that  I  have.  You  take  your  chances 
as  to  quality  if  you  buy  the  property,  which  cannot  be  inspected,  with 
notice  that  I  have  not  inspected  it,  and  have  no  knowledge  and  no 
opportunities  of  gaining  knowledge  as  to  its  quality.  You  take  your 
chances  under  the  same  conditions  upon  which  I  took  my  chances  in 
buying."  It  does  not  stand  like  goods  sold  upon  sample,  where  the 
goods  must  conform  to  the  pattern,  or  like  machinery,  to  be  manufac- 


IMPLIED   WARRANTY   IN   SALE   BY   DESCRIPTION  193 

tured  for  a  certain  purpose,  or  like  goods  in  existence  sold  at  the 
market  price  for  a  given  purpose,  without  notice  from  the  seller  that 
he  had  no  information  as  to  the  quality. 

Quite  likely  the  rule  ought  to  be,  and  quite  likely  the  rule  is,  that 
the  law  implies  a  warranty  as  to  quality  or  as  to  defects  not  obvious, 
if  the  owner  sells  an  article  of  merchandise  at  the  market  price,  know- 
ing it  is  to  be  used  for  a  particular  purpose,  without  any  disclaimer 
as  to  his  knowledge,  opportunities  of  inspection,  and  information  in 
respect  to  the  same,  and  under  circumstances  where  the  buyer  might 
fairly  rely  upon  the  seller's  supposed  superior  knowledge,  judgment, 
or  skill,  or  where  the  seller  disposes  of  goods  manufactured  by  him- 
self, or  in  which  he  deals,  for  the  market  value,  and  concerning  which 
he  had  opportunities  of  inspection  that  the  buyer  did  not  have;  but 
that  question  we  need  not  pass  upon,  and  we  only  refer  to  a  supposed 
situation  for  the  purpose  of  distinguishing  the  case  under  considera- 
tion. Suppose  it  were  a  piece  of  manufactured  shafting  that  both 
parties  were  looking  at, — an  article  manufactured  for  a  certain  pur- 
pose, and  in  respect  to  which  they  were  talking  about  a  sound  price, — 
and  the  seller  says :  "I  have  no  knowledge  as  to  the  soundness  of  the 
article  in  respect  to  latent  defects.  I  did  not  see  the  steel  or  iron  in 
the  rough  or  while  in  the  process  of  manufacture.  I  bought  it  yester- 
day, and  the  man  told  me  it  was  all  right."  Would  the  law,  under 
such  circumstances,  imply  a  warranty  against  latent  defects?  Is  not 
the  doctrine  of  implied  warranty  against  latent  defects  in  manufactured 
articles  based  altogether  upon  the  idea  of  the  superior  opportunities 
of  the  manufacturer  to  discover  defects  in  the  process  of  manufacture, 
and  the  supposed  superior  opportunities  and  information  of  the  dealer? 
Of  course,  if  it  should  turn  out  that,  although  the  piece  of  shafting 
was  recently  purchased,  and  although  the  seller  had  had  nothing  to 
do  with  the  manufacture,  that  he,  in  fact,  had  knowledge  or  informa- 
tion, and  had  deceived,  the  law  would  afford  redress  in  tort,  but  not 
in  contract  upon  implied  warranty. 

The  cases  most  relied  upon  as  in  favor  of  an  implied  warranty  and 
a  recovery  are  Jones  v.  Just,  L.  R.  3  Q.  B.  197,  and  Murchie  v.  Cornell, 
155  Mass.  60,  29  X.  E.  207,  14  L.  R.  A.  492,  31  Am.  St.  Rep.  526. 
We  cannot  look  upon  Jones  v.  Just  as  in  point  upon  the  question  lie- 
fore  us.  On  the  contrary,  it  differentiates  itself  from  the  case  under 
consideration  in  this  respect:  That  there  was  no  disclaimer  of  knowl- 
edge as  to  quality  or  opportunity  of  inspection  by  the  seller  or  its 
tits,  and,  moreover,  the  defect  against  which  the  implied  warranty 
was  held  to  exist  w;i  not  a  defect  in  quality  existing  in  the  original 
article  or  packing,  but  one  created  in  transil  by  shipwreck,  and  wet- 
ting  with    salt   water,   on   a   voyage    from    Manila   to    Singapore,   and 

repacking  at  thai  point. 

We  do  not  under  itand  thai   the  civil  law  maxim  caveal  venditor, 
which  is  based  upon  the  idea  that  a  sound  or  full  price  raises  a  war- 
Cooi.ey  Ca-i  a  8  \i  i:s — 13 


10-4  CONDITIONS    AND    WARRANTIES 

ranty  that  the  goods  are  sound,  has  been  fully  adopted  in  common-law 
jurisdictions,  although  the  harsh  caveat  emptor  rule  has  been  qualified 
somewhat,  so  that  the  warranty  of  the  vendor  as  to  quality  exists 
where  he  sells  property  about  which  he  assumes  to  have  knowledge,  or 
about  which  he  alone  has  the  means  of  knowledge,  or  under  such  cir- 
cumstances as  it  is  the  policy  of  the  law  to  charge  him  with  knowledge ; 
and,  as  said  in  Bridge  Co.  v.  Hamilton,  110  U.  S.  108,  116,  3  Sup. 
Ct.  537,  542,  28  L.  Ed.  86,  89:  "According  to  the  principles  of  de- 
cided cases,  and  upon  clear  grounds  of  justice,  the  fundamental  in- 
quiry must  always  be  whether,  under  the  circumstances  of  the  par- 
ticular case,  the  buyer  had  the  right  to  rely  and  necessarily  relied  on 
the  judgment  of  the  seller,  and  not  upon  his  own."  In  the  same  case 
Mr.  Justice  Harlan,  in  commenting  upon  Parkinson  v.  Lee,  2  East,  314, 
refers  (at  page  113,  110  U.  S.,  page  540,  3  Sup.  Ct,  and  page  88,  28 
L.  Ed.)  to  the  observation  of  Chief  Justice  Tindal  in  Shepherd  v. 
Pybus,  3  Man.  &  G.  868,  that  two  of  the  judges  participating  in  its 
decision  laid  "great  stress  upon  the  fact  that  the  seller  was  not  the 
grower  of  the  hops,  and  that  the  purchaser,  by  the  inspection  of  the 
hops,  had  as  full  an  opportunity  of  judgment  of  the  quality  of  the 
hops  as  the  seller  himself,"  and  observes :  "There  was,  consequently, 
nothing  in  the  circumstances  to  justify  the  buyer  in  relying  on  the 
judgment  of  the  seller  as  to  the  quality  of  the  commodity."  Mr.  Jus- 
tice Harlan  also  quotes  approvingly  (at  least  without  adverse  criticism) 
the  rule  given  by  Tindal,  C.  J.,  in  Brown  v.  Edgington,  2  Man.  &  G. 
279 :  "It  appears  to  me  to  be  a  distinction  well  founded,  both  in  rea- 
son and  on  authority,  that  if  a  party  purchases  an  article  upon  his  own 
judgment  he  cannot  afterwards  hold  the  vendor  responsible,  on  the 
ground  that  the  article  turns  out  to  be  unfit  for  the  purpose  for  which 
it  was  required;  but  if  he  relies  upon  the  judgment  of  the  seller,  and 
informs  him  of  the  use  to  which  the  article  is  to  be  applied,  it  seems 
to  me  the  transaction  carries  with  it  an  implied  warranty  that  the 
thing  furnished  shall  be  fit  and  proper  for  the  purpose  for  which  it 
was  designed." 

In  Jones  v.  Just  it  is  said :  "The  buyer  trusts  the  manufacturer  or 
dealer,  and  relies  upon  his  judgment,  and  not  upon  his  own."  This, 
we  think,  states  correctly  the  general  rule  and  the  true  principle  of  an 
implied  warranty.  It  exists  where  the  sale  is  under  such  circumstanc- 
es as  entitle  the  buyer  to  rely  upon  the  skill  and  experience  of  the 
manufacturer,  if  the  article  is  to  be  manufactured,  or,  if  the  goods  are 
in  existence,  upon  the  knowledge  and  opportunity  of  inspection  which 
the  seller  or  dealer  possesses,  and  which  the  buyer  does  not  possess. 
Hut  this  rule  is  not  broad  enough  to  include  a  sale  where  both  parties 
manifestly  have  the  same  knowledge  and  opportunities  of  inspection, 
and  where  the  seller  expressly  states  the  situation  to  the  buyer.  It 
cannot  be  said  that  the  buyer  has  a  right  to  rely  on  knowledge  or  skill 
or  opportunity  of  inspection  which  the  dealer  expressly  informs  him 
he  does  not  possess. 


IMPLIED   WARRANTY   IN   SALE    BY   DESCRIPTION  195 

In  Murchie  v.  Cornell,  155  Mass.  60,  62,  29  N.  E.  207,  14  L.  R. 
A.  492,  31  Am.  St.  Rep.  526,  Air.  Justice  Holmes,  in  delivering  the 
opinion  of  the  court,  said  there  was  some  evidence  to  show  that  the 
ice  was  not  identified  by  the  contract,  and  some  to  show  that  it  was 
so  identified,  and  that,  under  those  circumstances,  the  trial  justice  had 
charged  the  jury  that  no  warranty  of  quality  existed.  He  continued  : 
"If  the  instruction  is  wrong  in  either  view  which  the  jury  might  have 
taken  of  the  facts,  the  exceptions  must  be  sustained."  The  court 
thereupon  held  the  instruction  erroneous,  as  it  undoubtedly  was ;  for, 
if  the  ice  was  not  identified  by  the  contract,  a  warranty  was  plainly 
implied.  The  case  decides  nothing  concerning  a  sale  of  specific  ice  like 
the  sale  here  before  us. 

So  it  would  seem  that  neither  the  English  court  in  Jones  v.  Just,  nor 
the  Massachusetts  court  in  the  case  last  cited,  had  occasion  to  deal 
with  a  situation  which  involved  the  element  of  disclaimer  and  lack  of 
knowledge  and  opportunity  of  inspection  by  the  seller  which  is  pre- 
sented by  the  case  in  hand,  and  which  we  think  clearly  excludes  the 
idea  of  an  implied  warranty.  The  judgment  of  the  circuit  court  is 
reversed,  the  verdict  is  set  aside,  the  case  is  remanded  to  that  court 
for  further  proceedings,  and  the  plaintiff  in  error  recovers  her  costs 
in  this  court.11 


EDGAR  v.  JOSEPH  BRECK  &  SONS  CORP. 

(Supreme  Judicial  Court  of  Massachusetts,  1899.    172  Mass.  581,  52  X.  E.  10S3.) 

Action  by  YY.  W.  Edgar  against  the  Joseph  Breck  &  Sons  Corpora- 
tion. There  was  a  verdict  for  plaintiff,  and  defendant  brings  excep- 
tions. 

The  plaintiff  is  a  florist  and  grower  of  flowers.  He  bought  of  de- 
fendant, a  dealer  in  seeds,  a  bill  of  lily  bulbs  amounting  to  $125.  It 
is  for  a  breach  of  warranty  as  to  the  kind  of  lily  the  bulbs  would 
produce  that  this  action  is  brought. 

HOLMES,  J.12  This  is  an  action  for  breach  of  a  warranty  that 
certain  lily  bulbs  sold  by  the  defendant  to  the  plaintiff  were  of  the 
kind  known  as  "longiflorum."  The  case  has  been  tried,  and  is  here 
on  exceptions. 

The  first  exception  to  be  considered  is  to  a  refusal  to  direct  a  verdict 
for  the  defendant.  The  plaintiff  testified  thai  the  manager  of  the 
defendant'  '   department   spoke  to   him  abotil   supplying  him   with 

bulbs  for  the  following  Easter;  that  the  plaintiff  asked  aboul  the  lilies 
being  true  to  name,  and  that  the  manager  replied  that  he  would  supply 
him  with  those  true  to  name,  whereupon  the  plaintiff  gave  him  the 

order.     Afterwards  the  bulbs  were  sent,  and  turned  out  to  he  in  great 

u  Compare  Campion  v.  Marston,  99  Me.  U0,  59  ah.  648  (1904)  and  Parley  v. 
Whipp  [1900]  1  <}.  I'..  513. 
i  -•  Pa rt  "i  i in-  opinion  Is  omi( ted. 


19G  CONDITIONS    AND    WARRANTIES 

part  of  an  inferior  variety  (Harrisii),  of  which  the  bulb  is  not  dis- 
tinguishable from  the  longiflorum. 

The  defendant  objected  that  the  foregoing  facts  do  not  show  any- 
thing importing  a  warranty,  and,  whatever  their  import,  are  no  evi- 
dence of  a  warranty,  because  the  sale  was  executory,  and  that  the 
plaintiff's  only  remedy  on  such  a  contract  would  be  for  failure  to  de- 
liver the  goods;  that  the  agreement,  when  made,  was  within  the  stat- 
ute of  frauds,  and  did  not  become  binding  until  the  delivery  of  the 
bulbs,  which  were  sent  with  a  bill  having  a  printed  notice  that  the 
defendant  sold  no  seeds  with  a  warranty ;  and  that  there  was  no  evi- 
dence of  the  agent's  authority. 

As  to  the  first  of  these  objections,  we  do  not  think  it  necessary  to 
say  more  than  that  it  was  a  question  for  the  jury.  With  regard  to 
that  based  upon  the  sale  being  executory,  the  answer  is  that,  when  an 
executory  contract  is  made  for  the  sale  of  a  described  article,  the  cor- 
respondence between  which  and  the  description  cannot  be  ascertained 
until  after  acceptance,  words  which  before  are  words  of  description 
may  be  found  to  operate  as  a  warranty  after  the  goods  are  accepted, 
and  the  sale  is  complete.  It  might  work  injustice  to  treat  an  essential 
term  of  the  contract  as  performed  or  waived  at  a  time  when  the  pur- 
chaser still  is  unable  to  tell  whether  it  has  been  performed  or  not. 
White  v.  Miller,  71  N.  Y.  118,  129,  27  Am.  Rep.  13;  Shaw  v.  Smith, 
45  Kan.  334,  338,  25  Pac.  886,  11  L.  R.  A.  681.  See  Henshaw  v. 
Robins,  9  Mete.  (Mass.)  83,  43  Am.  Dec.  367. 

The  contract  was  made  when  the  parties  made  their  oral  agree- 
ment. It  does  not  matter  that  at  that  time  it  was  not  evidenced  by 
a  memorandum  in  writing.  The  statute  of  frauds  could  be  satisfied 
later  as  effectually  as  at  the  time.  It  was  satisfied  by  delivery  of  the 
bulbs.  The  general  printed  warning  on  the  bill  head  that  the  de- 
fendant did  not  warrant  seeds  could  have  no  effect  unless  it  led  to  the 
inference  that  the  old  contract  had  been  rescinded,  and  a  new  one 
substituted,  by  mutual  agreement.  Even  if  the  bill  had  been  receipted, 
it  would  not  have  excluded  proof  of  warranty,  and,  whether  it  was 
evidence  of  a  rescission  or  not,  it  did  not  establish  one  as  matter  of 
law.  Atwater  v.  Clancy,  107  Mass.  369 ;  Dunham  v.  Barnes,  9  Allen, 
352;  Hazard  v.  Loring,  10  Cush.  267,  268.  Perhaps  Lamb  v.  Crafts, 
12  Mete.  (Mass.)  353,  would  prove  reconcilable  with  the  latter  cases 
if  the  instrument  then  before  the  court  were  set  out.  The  case  is  not 
like  Rope  Co.  v.  Brigham,  170  Mass.  518,  522,  523,  49  N.  E.  1022, 
where  a  series  of  bills  were  sent  and  received  without  objection,  con- 
taining a  term  as  to  which,  so  far  as  appears,  there  had  been  no  pre- 
vious agreement,  and  which,  as  pointed  out  by  the  court,  was  a  prop- 
osition in  favor  of  the  buyer  of  the  goods.  In  that  case  there  was 
nothing  to  prevent  a  presumption  of  the  buyer's  assent. 

Finally,  we  should  hesitate  to  say  that  a  contract  which  was  within 
the  authority  of  an  agent  so  long  as  it  was  an  executory  contract  for 
the  sale  of  a  thing  of  a  certain  kind  ceased  to  bind  the  principal  after 


IMPLIED   WAKRANTY   OF   QUALITY  l'J7 

delivery,  when  it  operated  as  a  warranty  that  the  thing  was  of  that 
kind.  But  by  declaring  in  set-off  for  the  price  of  the  bulbs,  after  no- 
tice of  the  alleged  warranty  by  the  declaration,  the  defendant  affirmed 
the  sale,  whatever  it  turned  out  to  be,  and  must  take  it  with  its  burden. 
*     *     *     Exceptions  overruled. 


V.  Implied  Warranty  of  Quality  1! 


COYLE  v.  BAUM. 
(Supreme  Court  of  Oklahoma,  1S95.     3   Old.  695,  41  Pac.  3S9.) 

Burford,  J.14  This  was  an  action  brought  by  Joe  Baum  against 
Coyle  &  Smith  to  recover  damages  alleged  to  have  resulted  to  plain- 
tiff's horses  by  feeding  oats  containing  castor  beans,  which  he  had 
purchased  from  the  defendants.  There  was  a  trial  by  jury,  and  ver- 
dict for  plaintiff  for  $570.  The  jury  also  returned  special  findings 
of  fact.  Motion  for  new  trial  was  made  and  overruled,  and  judg- 
ment rendered  on  the  verdict.  The  defendants  bring  the  case  here 
upon  a  petition  in  error.    *    *    * 

The  uncontroverted  facts  were  that  the  plaintiff  purchased  from 
the  defendants  20  bushels  of  oats,  for  which  he  paid  35  cents  per 
bushel,  at  the  time  of  the  purchase;  that  the  defendants  were  at  that 
time  engaged  in  the  feed  business  in  Guthrie,  in  connection  with  the 
grocery  business,  and  that  plaintiff  was,  and  for  a  long  time  had  been, 
engaged  in  the  livery  business;  that  the  oats  were  delivered  him  by 
the  defendants  on  the  day  of  the  purchase,  and  placed  in  his  livery 
barn ;  that  his  horses  were  fed  from  said  oats  that  evening,  three 
feeds  the  following  day,  and  one  feed  on  the  following  morning  of 
the  second  day;  that  during  the  next  day  after  the  purchase  of  the 
oats  some  of  his  horses  became  sick;  that  he  sent  for  a  veterinary 
surgeon,  who  examined  the  horses,  and  found  them  suffering  from 
poison.  An  examination  was  made  of  the  oats  the  following  morning, 
and  they  were  found  to  contain  considerable  quantities  of  castor 
beans  intermixed  with  said  oats;  that  the  plaintiff,  on  being  informed 
of  the  fact  that  the  beans  were  in  the  oats,  went  to  the  defendants' 
place  of  bi  and  informed  them  thai  the  oats  which  he  had  pur- 

chased from  them  had  beans  in  them,  and  were  unfit  to  feed 

his  horses.  They  informed  him  thai  if  he  did  not  want  the  ".-its 
to  bring  them  back,  and  they  would  pay  him  his  money  back.  The 
unused  portion  of  the  oats  were  returned  to  Coyle  &  Smith's  place 

1 1  i    i  ..  on  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  78. 

i«  Part  of  the  opinion  la  omitted. 


198  CONDITIONS    AND    WARRANTIES 

of  business,  and  they  weighed  them  out  and  paid  the  plaintiff  35 
cents  per  bushel  for  the  portion  returned.  Nothing  was  said  at  the 
time  about  the  oats  which  had  been  used,  nor  was  any  express  agree- 
ment made  that  the  return  of  the  oats  and  repayment  of  the  purchase 
money  should  be  in  satisfaction  of  any  damages  resulting  from  the 
use  of  the  oats  which  had  been  fed.     *     *     * 

The  first  ruling  complained  of  is  the  action  of  the  trial  court  in  re- 
fusing to  give  instruction  numbered  4,  requested  by  the  defendants. 
The  instruction  is  as  follows :  "The  buyer  of  an  article  upon  an  im- 
plied warranty  of  quality  or  fitness  has  two  remedies  upon  the  dis- 
covery of  the  breach  thereof.  He  may  either  return  the  goods  pur- 
chased, and  demand  the  purchase  money  to  be  returned  to  him,  or 
he  may  retain  the  goods  and  sue  for  his  damages.  The  one  remedy 
is  exclusive  of  the  other,  and  if  you  find  from  the  evidence  that  the 
.oats  were  sold  by  the  defendants  to  the  plaintiff  upon  the  agreement 
or  understanding  that  they  were  to  be  fed  to  the  horses  of  the  plain- 
tiff, and  that  such  oats  contained  castor  beans,  and  that  the  plaintiff, 
after  the  discovery  of  that  fact,  returned  said  oats  and  received  a  re- 
turn from  the  defendants  of  his  purchase  price,  after  knowing  the 
dangerous  consequences  of  their  use,  the  plaintiff's  election  to  receive 
a  return  of  the  purchase  money  for  his  oats  would  constitute  a  waiver 
of  any  right  to  prosecute  this  action  for  damages,  and  if  you  find 
such  to  be  the  fact,  it  will  be  your  duty  to  return  a  verdict  for  the  de- 
fendants." 

This  instruction  does  not  contain  a  correct  exposition  of  the  law, 
as  applicable  to  the  case  at  bar.  The  question  as  to  whether  or  not 
the  return  of  the  unused  portion  of  the  oats  and  a  repayment  of  the 
purchase  price  for  them  was  a  satisfaction  of  the  entire  claim  of  Baum 
was  a  question  for  the  jury  to  determine  from  all  the  facts  and  the 
intention  of  the  parties.  If  all  the  oats  had  been  returned,  and  the 
entire  purchase  price  repaid,  it  would  have  presented  a  different  ques- 
tion. The  sale,  as  to  the  portion  of  the  oats  used,  was  not  rescinded, 
and  could  not  have  been.  The  damage  was  done  by  the  portion  used, 
and  not  by  the  portion  returned.  It  was  a  new  and  independent 
agreement  to  take  back  the  oats  not  used,  and  repay  the  consideration, 
and  could  only  be  a  repudiation  of  the  former  agreement  to  that  ex- 
tent ;  and  in  the  absence  of  an  agreement  to  settle  the  damages  occa- 
sioned by  the  breach  of  the  warranty  as  to  the  used  portion,  and  as 
to  which  the  sale  had  become  absolute,  the  right  of  action  would  still 
exist.  The  authorities  cited  by  counsel  for  plaintiff  in  error  do  not 
support  their  position. 

The  case  of  Alden  v.  Thurber,  149  Mass.  271,  21  N.  E.  312,  is  re- 
lied on  by  plaintiff  in  error.  In  that  case,  Thurber  &  Co.  agreed  to 
sell  Alden  about  10,000  pounds  of  raspberry  jam.  They  sent  the  jam 
to  Alden  at  Boston,  and  he  remitted  to  them  $1,000  in  part  payment 
of  the  agreed  price.  After  the  receipt  of  the  jam,  Alden  claimed  that 
it  was  not  pure  raspberry  jam,  as  his  contract  called  for,  and  wrote 


IMrLIED    WARBANTT   OF   QUALITY  199 

Thurber  &  Co.  to  tbat  effect.  Thurber  &  Co.  insisted  that  the  jam 
was  the  kind  they  had  agreed  to  furnish,  but  wrote  to  Alden  that, 
notwithstanding  that  fact,  as  they  still  desired  to  retain  his  trade,  they 
were  willing  to  receive  the  whole  lot  back,  and  credit  it  up  to  him, 
together  with  the  freight  charges,  -and  in  this  way  settle  the  matter. 
Upon  receipt  of  this  letter  Alden  sent  back  all  the  jam,  except  one 
keg  that  he  had  sold,  and  requested  Thurber  &  Co.  to  remit  his  money 
at  once.  Thereupon  Thurber  &  Co.  credited  Alden  with  the  jam 
returned,  and  the  expense  of  freight  and  cartage,  and  remitted  him 
the  balance  of  the  $1,000.  The  court  said:  "This  was  a  mutual 
rescission  of  the  contract.  The  letter  of  the  defendants  was  an  offer 
to  settle  and  compromise  the  controversy  between  the  parties.  The 
acts  and  conduct  of  the  plaintiff  was  an  adequate  acceptance  of  that 
offer.  This  was  a  waiver  of  the  right  to  sue  for  any  preceding  breach 
of  the  contract.  The  performance  by  the  defendants  of  the  new 
agreement  operated  as  an  accord  and  satisfaction  for  any  breach,  and 
discharged  the  old  contract.  Such  was  clearly  the  intention  of  the  de- 
fendants, and  the  plaintiff  accepted  their  offer  unconditionally,  and 
this  induced  them  to  perform  it."  The  court  bases  its  conclusion  in 
the  above  case  upon  the  ground  that,  by  the  agreement  of  the  par- 
ties, the  new  contract  was  to  be  an  entire  settlement  of  the  matters 
between  them,  and  amounted  to  an  accord  and  satisfaction, — a  com- 
promise. 

There  are  none  of  the  elements  of  a  compromise  in  the#  case  at  bar, 
nor  does  the  evidence  present  any  of  the  elements  of  an  accord  and 
satisfaction.  There  was  no  agreement  to  settle  anything.  Coyle  & 
Smith  proposed  to  repurchase  the  unused  oats,  they  were  returned. 
and  they  weighed  them  out  and  paid  for  them  at  the  original  price. 
Nothing  was  compromised,  and  there  was  nothing  else  surrendered  on 
either  side.  Coyle  &  Smith  got  back  the  same  oats  they  sold,  at  the 
e  price  per  bushel,  except  the  portion  which  had  done  the  damage, 
and  nothing  was  said  as  to  this  portion,  or  as  to  a  sell  lenient  or  com- 
promise of  anything.  The  payment  of  a  portion  of  an  undisputed 
debt,  although  accepted  in  full  satisfaction,  and  a  receipt  in  full  is 
given,  i^  not  a  satisfaction  of  the  balance,  and  will  not,  where  there 
is  no  new  consideration,  estop  the  creditor  from  recovering  the  re 
mainder  of  such  debt.  Railroad  Co.  v.  Davis,  35  Kan.  464,  11  Pac. 
421.  In  the  case  at  bar  there  was  no  new  consideration  passed.  The 
oats  were  presumably  worth  as  much  when  returned  as  when  orig- 
inally purchased,  and  they  were  retaken  at  the  original  purchase  price, 
and  the  exact  amount  returned,  and  no  more  paid  for.  Neither  party 
mentioned  the  claim  for  damage  occasioned  by  the  portion  nol  re- 
turned, and  nothing  was  said  as  to  a  compromise,  or  a  final  or  full 
settlement. 

To  constitu  '''d   and   satisfaction,  that   which   is   received   by 

creditor  musl   b  him   in   satisfaction,  and   whether 

the  such  an  acceptance  is  a  question   for  the  jury.     I' 


200  CONDITIONS    AND    WARRANTIES 

Algeicr,  87  Ind.  256;  Hardman  v.  Bellhouse,  9  Mces.  &  W.  596; 
Hearn  v.  Kielil,  38  Pa.  147,  80  Am.  Dec.  472 ;  Telegraph  Co.  v.  Bu- 
chanan, 35  Ind.  429,  9  Am.  Rep.  744.  The  refused  instruction  states, 
as  a  proposition  of  law,  that  if  Baum  returned  the  oats,  and  received 
pay  for  same,  such  return  and  repayment  was  a  bar  to  a  recovery 
for  damages.  It  did  not  submit  the  question  to  the  jury,  to  be  de- 
termined as  a  fact,  whether  or  not  there  had  been  a  compromise,  or 
accord  and  satisfaction,  and  the  court  correctly  refused  to  give  it. 
Rogers  v.  Rogers,  139  Mass.  440, 1 1  N.  E.  122,  cited  by  plaintiff  in 
in  ,  error,  fully  supports  this  doctrine.  In  that  case  the  court  says : 
"Whether  the  new  agreement  was  substituted  for  the  old,  and  thus 
operated  as  a  rescission  or  discharge  of  it,  must  be  determined  by  the 
intention  of  the  parties  to  be  ascertained  from  their  correspondence 
and  conduct."  See,  also,  as  supporting  this  position,  Peck  v.  Requa, 
13  Gray  (Mass.)  407;  Munroe  v.  Perkins,  9  Pick.  (Mass.)  298,  20  Am. 
Dec.  475 ;  Holmes  v.  Doane,  9  Cush.  (Mass.)  135 ;  Cooke  v.  Murphy, 
70  111.  96 ;  Moore  v.  Locomotive  Works,  14  Mich.  266. 

In  the  case  of  Thornton  v.  Wynn,  12  Wheat.  193,  6  L.  Ed.  595,  the 
question  before  the  court  was  "not  whether  the  purchaser  of  a  horse 
which  is  warranted  sound  has  a  remedy  over  against  the  vendor  upon 
the  warranty,  in  case  it  be  broken,  but  whether,  in  an  action  against 
him  for  the  purchase  money,  he  can  be  permitted  to  defend  himself 
by  proving  a  breach  of  warranty."  And  on  this  question  the  court 
held  to  the  ancient  but  now  obsolete  rule  that  the  vendee  must  pay 
the  purchase  money,  and  was  put  to  his  separate  action  upon  the  war- 
ranty for  his  damages,  unless  it  was  shown  that  the  vendor  knew 
of  the  unsoundness  ot  the  horse,  and  the  vendee  tendered  a  return  of 
it  within  a  reasonable  time.  There  are  some  dicta  in  the  discussion 
of  the  case  that  would  seem  to  support  counsel's  position,  but  the 
law  of  the  case  is  not  in  conflict  with  the  views  we  have  expressed  in 
the  case  under  consideration. 

In  Chapman  v.  Searle,  3  Pick.  (Mass.)  38,  after  there  had  been  a 
sale  and  delivery  of  goods,  there  was  an  agreement  to  take  the  goods 
back  and  return  the  consideration.  This  agreement  was  never  con- 
summated. It  was  contended  that  this  agreement  was  a  rescission  of 
the  contract  of  purchase.  The  court  said:  "It  was  contended  on 
the  part  of  the  defendant  that  the  contract  was  rescinded  by  the  orig- 
inal parties  before  the  plaintiff's  title  accrued.  If  our  view  of  the 
case  is  correct,  the  contract  was  executed,  and  was  not  merely  exec- 
utory, and  so  it  could  not  be  considered  as  rescinded,  which  must  be 
understood  as  discharging  or  canceling  it  while  it  remained  to  be 
performed.  Finally,  it  was  contended  for  the  defendant  that  there 
was  a  resale  of  the  property  by  Ludlow  to  Whiting  before  the  plain- 
tiff's title  accrued.  But  upon  a  careful  review  of  the  evidence,  we 
can  perceive  only  an  agreement  to  reconvey  at  some  future  time,  and 
upon  certain  conditions,  which  were  never  complied  with  before 
Ludlow  was  obliged  to  assign  all  his  property  to  the  plaintiffs."    We 


IMPLIED   WARRANTY   OF   QUALITY  201 

find  nothing  in  the  case  last  cited  to  support  the  contention  of  coun- 
sel for  plaintiff  in  error.  Upon  the  contrary,  it  supports  the  theory 
that  the  sale  of  the  oats  was  an  executed  contract ;  and,  there  being 
nothing  further  to  be  done  under  the  contract  of  sale,  it  could  not  be 
rescinded,  and  that  the  agreement  by  which  a  portion  of  the  oats  were 
returned  was  a  resale  or  new  agreement.  The  warranty  found  to 
have  been  made  at  the  time  of  the  sale  of  the  oats  is  a  collateral  agree- 
ment, and  not  a  condition  of  the  sale,  and  this  action  is  for  a  breach 
of  the  warranty,  and  not  an  action  to  enforce  the  contract.     *     *     * 

Park  v.  Richardson  &  Boynton  Co.,  81  Wis.  399,  51  N.  W.  572, 
is  a  case  relied  upon  by  plaintiffs  in  error.  This  was  an  action  by 
Park  et  al.  v.  Richardson  &  Boynton  Co.,  to  recover  damages  for 
alleged  defects  in  a  furnace  .sold  to  plaintiffs,  and  placed  in  their  store- 
house for  heating  purposes.  Under  the  contract  of  sale  there  was 
an  express  agreement  that  if  the  furnace  failed  to  work  satisfactorily 
the  vendors  would  substitute  a  different  size,  or  remove  the  furnace 
and  refund  the  amount  paid  for  same,  at  the  election  of  the  vendees. 
The  furnace  failed  to  work  as  agreed.  The  plaintiffs,  in  their  peti- 
tion, blended  two  causes  of  action,  one  for  return  of  purchase  money 
and  the  other  for  breach  of  warranty.  The  court  held,  on  appeal, 
that  the  plaintiffs  could  not  rely  upon  both  remedies  in  one  action; 
that  they  might  rely  upon  their  contract  and  return  the  property  and 
recover  their  purchase  money,  or  they  could  keep  the  property  and 
sue  for  breach  of  warranty;  that  the  two  remedies  were  alternative 
under  the  terms  of  his  agreement.  The  court  further  held  that  keep- 
ing and  paying  for  the  property  was  no  waiver  of  the  right  to  sue 
for  damages  for  a  breach  of  warranty. 

We  find  nothing  in  this  case  to  conflict  with  our  view  of  the  case 
at  bar.  The  keeping  and  paying  for  the  oats  that  had  been 
before  the  discovery  of  their  quality  was  not  a  waiver  of  any  right 
to  recover  for  damages  occasioned  by  their  use,  and  the  resale  of  the 
unused  portion  to  the  original  vendor,  without  any  agreement  or  in- 
timation by  either  party  that  such  resale  should  be  in  satisfaction 
or  settlement  of  such  damages,  is  no  bar  to  a  recovery  for  breach  of 
warranty.  Every  breach  of  warranty  occasioning  any  damage  or 
detriment  gives  a  right  of  action  to  the  party  damaged,  and  such  right 
of  action  continues  in  his  favor  until  the  same  is  satisfied,  waived,  or 
barred  in  some  manner.  There  is  nothing  in  the  case  al  bar  that 
shows  any  intent  or  purpose  on  the  pari  of  the  partie  to  satisfy  or 
waive  this  right,  and  we  find  nothing  in  the  law  or  tin-  acts  "i"  Baum 
that  will  bar  such   right. 

Philadelphia  Whiting  Co.  v.  Detroil  White  Lead  Works,  58  Mich. 
2'».  _M  X.  W.  881,  is  another  case  relied  u\»<u  by  coun  el  for  plaintiffs 
in  error.     We  find  nothing  in  tl  i    to  support  their  contention. 

The   Philadelphia  Whiti  ompany  sold  to  the  white  lead  works 

300  barrel    of  the  b<  imercial  whiting,  to  be  ui  ed  in  manufactur- 

ing putty.    After  using  several  barrels  of  the  whiting  in  the  maim- 


202  CONDITIONS    AND    WARRANTIES 

facture  of  putty  for  their  trade,  they  found  it  of  an  inferior  quality, 
and  so  notified  the  vendors,  and  stored  the  remainder  for  the  use  of 
the  vendors,  and  refused  to  pay  for  same.  The  vendors  sued  for  the 
.purchase  price.  The  vendees  set  up  the  breach  of  contract  and  dam- 
ages; and  they  recovered  judgment  against  the  vendors  for  $509.20. 
The  vendors  appealed.  The  only  questions  determined  by  the  ap- 
pellate court  were:  (1)  Where  the  contract  for  sale  of  goods  is  made 
by  letter,  such  letter  or  letters  are  the  only  evidence  that  can  prop- 
erly be  introduced  to  show  what  the  contract  between  the  parties 
was.  (2)  Where  the  character  of  the  goods  purchased  is  such  that 
their  quality  cannot  be  determined  by  looking  at  and  examining 
them,  but  by  actual  use  only,  the  purchaser  will  be  entitled  to  a  rea- 
sonable time  in  which  to  test  the  goods  and  ascertain  whether  they 
are  the  kind  ordered,  and,  until  this  question  is  determined,  the  re- 
tention of  the  goods  does  not  amount  to  an  acceptance  thereof. 

Evidently  the  foregoing  case  treated  of  a  conditional  sale,  where 
the  ownership  of  the  property  never  passed  to  the  vendees,  and  on  the 
discovery  of  the  inferior  quality  of  the  goods  they  had  a  right  to  re- 
ject the  goods  and  refuse  payment.  It  was  not  a  rescission  of  the 
contract,  but  a  refusal  to  consummate  a  contract.  In  said  case  it 
was  contended,  on  appeal,  that  the  trial  court  should  have  allowed  the 
plaintiffs  to  recover  for  the  value  of  the  42  barrels  used  by  the  ven- 
dees in  testing  the  whiting,  before  they  found  out  its  inferiority.  On 
this  question  the  supreme  court  of  Michigan  said :  "Had  this  been 
done,  simple  justice  would  have  required  the  allowance  to  the  de- 
fendant of  the  damages  it  sustained  in  the  use  it  made  of  the  plain- 
tiff's goods  in  testing  the  quality,  and  this,  according  to  the  undis- 
puted testimony,  was  at  least  $1,000.  So  that  it  clearly  appears  the 
plaintiff  has  not  been  injured  by  the  action  of  the  court  on  this  point. 
Certainly  the  defendant  derived  no  benefit  from  the  amount  used." 

The  principle  announced  above  is  applicable  to  the  case  at  bar. 
Coyle  &  Smith  received  and  retained  pay  for  the  portion  of  the  oats 
that  were  used  before  their  poisonous  quality  was  discovered,  and 
simple  justice  would  require  the  allowance  to  Baum  of  the  damages 
he  sustained  in  the  use  he  made  of  the  oats  that  were  fed  to  his 
horses.     *     *     *     Affirmed. 


CARLETON  v.  LOMBARD,  AYRES  &  CO. 

(Court  of  Appeals  of  New  York,  1896.     149  N.  Y.  137,  43  N.  E.  422.) 
See  ante,  p.  176,  for  a  report  of  the  case. 


BLACKMORE  v.  FAIRBANKS,  MORSE  &  CO. 
(Supreme  Court  of  Iowa,  1890.    79  Iowa,  2S2,  44  N.  W.  548.) 
See  ante,  p.  183,  for  a  report  of  the  case. 


IMPLIED  WARRANTY  OF  QUALITY  203 


MURCHIE  v.  CORNELL. 

(Supreme  Judicial  Court  of  Massachusetts,  1S91.     155  Mass.  GO,  29  N.  E.  207, 

11  L.  R.  A.  402,  31  Am.  St.  Rep.  520.) 

Action  by  James  Murchie  et  al.  against  Pardon  Cornell  et  al.  to 
recover  for  a  cargo  of  ice  sold  by  plaintiffs  to  defendants.  Verdict 
for  plaintiffs.     Defendants  appeal. 

Holmes,  J.  The  plaintiffs  agreed  to  sell,  and  the  defendants 
agreed  to  buy,  a  cargo  of  ice  of  360  tons,  to  be  shipped  from  Pem- 
broke, Me.  From  some  of  the  evidence  it  would  seem  that  the  ice 
was  not  identified  by  the  contract,  but  was  to  be  supplied  and  ap- 
propriated to  the  contract  by  the  plaintiffs,  the  sellers.  From  other 
parts  of  the  testimony  it  might  be  inferred  that  the  ice  was  identified 
by  the  contract,  but  at  a  time  and  under  circumstances  when  the 
defendants  had  no  opportunity  to  inspect  it  before  shipment.  The 
judge  instructed  the  jury  generally  that  there  was  an  implied  affirma- 
tion that  the  ice  was  of  such  a  kind  that  it  could  be  shipped,  trans- 
ported by  sea,  and  discharged  at  New  Bedford,  as  contemplated  by 
the  contract,  and  no  other  implied  affirmation  or  warranty.  If  the 
instruction  is  wrong  in  either  view  which  the  jury  might  have  taken 
of  the  facts,  the  exceptions  must  be  sustained,  and  it  is  unnecessary 
to  consider  whether  the  implication  would  be  more  extensive  in  the 
former  case  than  in  the  latter. 

In  some  contracts  of  the  latter  kind,  when  the  sale  is  of  specific 
goods,  but  the  buyer  has  no  chance  to  inspect  them,  the  name  given 
to  the  goods  in  the  contract,  taken  in  its  commercial  sense,  may  de- 
scribe all  that  the  purchaser  is  entitled  to  demand.  So  it  was  held 
with  regard  to  "Manilla  sugar"  in  Gossler  v.  Eagle  Sugar  Refinery, 
103  Mass.  331. 

But  in  many  cases  like  the  present  the  inference  is  warranted  that 
the  thing  to  be  furnished  must  be  not  only  a  thing  of  the  name  men- 
tioned in  the  contract,  but  something  more  How  much  more  may 
depend  upon  circumstances,  and  at  times  the  whole  question  may  be 
for  the  jury.  If  a  very  vague,  generic  word  is  used,  like  "ice,"  which, 
taken  literally,  may  he  satisfied  by  a  worthless  article,  and  the  con- 
tract is  a  commercial  contract,  the  court  properly  may  instruct  the 
jury  that  the  word  means  more  than  its  hare  definition  in  the  dic- 
tionary, and  call  i   merchantable   article  <<\   that    name.      It    I 

ol  furnished,  the  contracl  i  nol  performed.  Warner  v.  lee  Co., 
7\  Me.  475 ;  Swett  v.  Shumway,  102  Mass.  365,  369,  3  \m.  Rep.  471  ; 
Whitmore  v.  Iron  Co.,  2  Allen,  52,  58. 

In  a  sal--  of  "Manilla  hemp,"  like  that  of  t!  ar  in  G  V. 

Eagle  Sugar   R<  finery,  it  was  held  in   England  that  the  hemp  mu  t 

merchantable,     [ones  v.  In  t.  I  I  >.  B.  19) 

4  Camp.  144;    Howard  v.  Ho  Wend.  (N.  N.   |  1,  35  Am. 

Dec.  ?71;  Merriam  v.  Field,  39  Wis.  578;  Fish  v.  I  rry,  22  111. 


-04  CONDITIONS    AND    WARRANTIES 

288,  299;  Babcock  v.  Trice,  18  111.  420,  68  Am.  Dec.  560.  See  Hight 
v.  -Bacon,  126  Mass.  10,  12,  30  Am.  Rep.  639 ;  Hastings  v.  Lovering, 
2  Pick.  214,  220,  13  Am.  Dec.  420. 

2.  The  plaintiffs  put  in  evidence  tending  to  show  that  the  defend- 
ants never  notified  them  of  any  defect  in  the  quality  or  condition  of 
the  ice  until  after  this  suit.  To  meet  this,  the  defendants  offered  a 
protest,  signed  and  sworn  to  by  one  of  them  on  the  day  the  ice  ar- 
rived. This  protest  was  no  evidence  that  the  statements  contained 
in  it  were  true,  or  that  the  defendants'  story  was  not  false.  So  far  as 
the  plaintiffs'  evidence  was  introduced  for  the  purpose  of  showing 
such  an  acceptance  of  the  ice  as  to  bar  the  defendants  from  alleging 
that  it  did  not  satisfy  the  contract,  (Morse  v.  Moore,  83  Me.  473, 
22  Atl.  362,  13  L.  R.  A.  224,  23  Am.  St.  Rep.  783 ;  Gaylord  Manuf'g 
Co.  v.  Allen,  53  N.  Y.  515,  519,)  the  protest,  of  course,  had  no  bear- 
ing. And,  although  it  did  show  that  the  defendants'  story  was  not 
an  afterthought,  it  was  properly  excluded,  the  plaintiffs,  so  far  as  ap- 
pears, not  having  taken  that  specific  point.  Wallace  v.  Story,  139 
Mass.  115,  29  N.  E.  224. 

Exceptions  sustained. 


VI.  Implied  Warranty  in  Sale  by  Sample  u 


GOULD  v.  STEIN. 

(Supreme  Judicial  Court  of  Massachusetts,  1889.    149  Mass.  570,  22  N.  E.  47, 
5  L.  It.  A.  213,  14  Am.  St.  Rep.  455.) 

Action  by  Henry  A.  Gould  and  others  against  Abe  Stein  and  others 
for  breach  of  warranty  on  the  sale  of  certain  rubber.  Judgment  for 
plaintiffs.     Defendants  except. 

C.  Allen,  J.  The  determination  of  this  case  depends  upon  the 
construction  to  be  given  to  the  bought  and  sold  notes,  which  were 
similar  in  their  terms.  It  does  not  admit  of  doubt  that  these  notes 
were  intended  to  express  the  terms  of  the  sale.  They  were  carefully 
prepared  and  were  read  to  the  parties  line  by  line,  as  they  were  writ- 
ten. Of  course  all  the  existing  circumstances  may  be  looked  at,  but 
the  contract  of  the  parties  is  to  be  found  in  what  was  thus  written, 
when  read  in  the  light  of  those  circumstances.  The  goods  respecting 
which  the  controversy  has  arisen  were  a  certain  lot  of  rubber  which 
the  defendants  had  on  hand,  and  which  could  be  identified.  The 
transaction  was  a  present  sale,  and  not  an  agreement  to  deliver  rubber 
in  the  future.  The  defendants  now  contend  that  the  contract  was 
executory,  and  that,  if  there  was  any  warranty,  there  was  none  which 
survived  the  acceptance  of  the  goods  by  the  plaintiffs;  but  the  argu- 

is  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  79. 


IMPLIED   WARRANTY   IN   SALE   BY   SAMPLE  205 

merit  that  it  was  not  an  executed  present  sale  finds  no  support  in  the 
bill  of  exceptions,  and  no  such  point  was  taken  at  the  trial ;  and  there 
is  no  occasion  to  consider  the  further  question  whether,  in  case  of  an 
executory  agreement  to  sell,  a  warranty  will  survive  the  acceptance 
of  the  goods.  The  bought  note,  which  the  plaintiffs  put  in  evidence, 
was  of  "148  bales  Ceara  scrap  rubber,  as  per  samples,  viz.,  46  bales 
of  first  quality  marked  'A;'  102  bales  of  second  quality."  The  con- 
troversy relates  only  to  the  102  bales.  It  appeared  that  there  was 
no  exact  standard  by  which  the  grade  of  rubber  could  be  fixed,  but 
that  it  was  a  matter  of  judgment.  The  court  also  found  that  Ceara 
rubber  of  second  quality  is  well  known  in  the  market  as  distinct  from 
a  third  or  inferior  grade;  and  there  was  evidence  which  well  warranted 
this  finding.  The  parties  in  their  contract  recognized  the  existence 
of  different  grades  or  qualities,  though  all  of  the  rubber  properly 
classified  as  of  first  quality  or  of  second  quality  might  not  be  of  an 
exactly  uniform  standard  or  grade. 

The  plaintiffs  at  the  trial  claimed  damages  merely  on  the  ground 
that  the  102  bales  were  not  of  second  quality,  and  made  no  claim  of 
inferiority  to  the  samples  shown,  as  a  distinct  ground,  but  waived  all 
claim  founded  on  the  exhibition  of  samples,  and  the  court  found  dam- 
ages for  the  plaintiffs  solely  on  the  ground  that  the  defendants  failed 
to  deliver  rubber  of  the  second  quality;  ruling  that  the  broker's  note 
contained  an  absolute  warranty  of  second  quality  rubber.  If  this  ruling 
was  right,  it  disposes  of  the  defendants'  second  and  third  requests 
for  instructions.  The  general  rule  is  familiar  and  admitted  that  a 
sale  of  goods  by  a  particular  description  imports  a  warranty  that  the 
goods  are  of  that  description.  Henshaw  v.  Robins,  9  Mete.  83,  43 
Am.  Dec.  367;  Harrington  v.  Smith,  138  Mass.  92;  White  v.  Miller, 
71  N.  Y.  118,  27  Am.  Rep.  13;  Osgood  v.  Lewis,  2  Har.  &  G.  495; 
Randall  v.  Newson,  L.  R.  2  Q.  B.  Div.  102;  Jones  v.  Just,  L.  R.  3 
Q.  B.  197;  Josling  v.  Kingsford,  13  C.  B.  (N.  S.)  447;  Bowes  v. 
Shand,  L.  R.  2  App.  Cas.  455.  And  where  goods  are  described  on  a 
sale  as  of  a  certain  quality,  which  is  well  known  in  the  market  as  indi- 
cating goods  of  a  distinct,  though  not  absolutely  uniform,  grade  or 

standard,  the  description  imports  a  warranty  that  the  g ts  arc  of  that 

grade  or  standard.     In  such  cases,  the  words  denoting  the  grade  or 
quality  of  the  goods  are  not  to  be  treated  as  merely  words  of  general 
commendation,  but  they  are  held  to  be  words  having  a  specific  com- 
mercial signification.    Thus,  in  li  iv.  Lovering,  2  Pick.  214,  13 
Am.  I  )ec.  420,  the  words,  in  a  sale-note,  "Sold  2,000  gallons  prime  qual 
ity  winter  oil,"  were  held  to  amounl  to  a  warranty  thai  the  articles 
sold           d  with  the  description;  and  in  Henshaw  v.  Robins,  9  M 
87,  it  was  said  thai  the  doctrine  laid  down  in  thai  case  has  ever  since 
n  considered  as  the  settled  law  in  this  commonwealth.    So  in  Chis- 
holm  v.  Proudfoot,  15  l '.  C.  Q.  B.  203,  it  was  held  thai  where  a  man 
ufacturer  of  Hour  marked  it  as  of  a  particular  quality,  viz.,  "Trafalgar 


206  CONDITIONS    AND    WARRANTIES 

Mills  Extra  Superfine,"  that  amounted  to  a  warranty  of  its  being  of 
such  a  quality.  A  similar  doctrine  may  be  found  in  Hogins  v.  Plymp- 
ton,  11  Pick.  97;  Winsor  v.  Lombard,  18  Tick.  57,  60;  Forcheimer 
v.  Stewart,  65  Iowa,  593,  22  N.  W.  886,  54  Am.  Rep.  30;  Mader  v. 
Jones,  1  N.  S.  Law  R.  82.  In  Gardner  v.  Lane,  9  Allen,  492,  85  Am. 
Dec.  779 ;  Id.,  12  Allen,  39,  it  appeared  that  the  statutes  provided  for 
the  preparation,  division  into  different  qualities,  packing,  inspecting, 
and  branding  of  mackerel,  and  it  was  held' that  if  a  certain  number 
of  barrels  of  No.  1  mackerel  were  sold,  and  by  mistake  barrels  of  No. 
3  mackerel  were  delivered,  no  title  passed  to  the  purchaser,  and  that 
the  barrels  of  No.  3  mackerel  thus  delivered  by  mistake  might  be  at- 
tached as  property  of  the  vendor,  and  that  each  different  quality,  after 
being  thus  prepared  for  market,  was  to  he  regarded  as  a  different  kind 
of  merchandise,  so  that  no  title  passed  to  the  vendee;  there  being  no 
assent  on  the  part  of  the  vendee  to  take  the  No.  3  mackerel  in  place 
of  those  which  he  agreed  to  buy. 

Now,  if  the  words  "as  per  samples"  had  not  been  in  the  bought 
note,  it  would  be  quite  plain  that  the  present  case  would  fall  within 
the  ordinary  rules  above  given.  But  the  insertion  of  those  words  raises 
the  inquiry  whether  they  limit  the  implied  warranty  of  the  vendor,  so 
that  if  the  rubber  sold  was  equal  in  quality  to  the  sample  he  would  be 
exonerated  from  liability,  though  it  was  not  entitled  to  be  classed  as 
of  the  second  quality.  If  no>  other  meaning  could  be  given  to  the  words 
"as  per  samples"  except  that  they  alone  were  to  be  considered  as  show- 
ing the  quality  of  rubber  to  be  delivered,  the  argument  in  favor  of  the 
defendants'  view  would  be  irresistible.  So  if  there  was  a  plain  and 
necessary  inconsistency  between  the  two  descriptions  of  the  rubber, 
it  might  perhaps  be  successfully  contended  that  the  vendor's  obligation 
was  only  to  deliver  rubber  which  would  conform  to  the  inferior  quality 
described ;  that  is  to  say,  that  in  case  of  such  inconsistency,  the  words 
"as  per  samples"  should  prevail,  and  the  words  "of  second  quality" 
be  rejected.  If  it  were  to  be  held  that  the  vendor's  obligation  was 
fulfilled  by  delivering  rubber  of  a  quality  equal  to  the  samples,  though 
it  was  not  of  the  second  quality,  then  the  words  "of  second  quality" 
would  mean  nothing,  or  they  would  be  overborne  by  the  words  "as  per 
samples."  But  if  it  is  found  that  the  bought  note  admits  of  a  reason- 
able construction  by  which  a  proper  significance  can  be  given  both  to 
the  words  "as  per  samples"  and  also  to  the  words  "of  second  quality," 
there  will  be  no  occasion  to  disregard  either. 

Cases  are  to  be  found  in  the  books  where  such  a  construction  has 
been  given  to  contracts  of  sale.  Thus,  in  Whitney  v.  Boardman,  118 
Mass.  242,  a  sale  of  Cawnpore  buffalo  hides,  with  all  faults,  was  held 
to  mean  with  such  faults  and  defects  as  the  articles  sold  might  have, 
retaining  still  its  character  and  identity  as  the  article  described  ;  *and  the 
court  cited  with  approval  the  case  of  Shepherd  v.  Kain,  5  Barn.  &  Aid. 
240,  where  there  was  a  sale  of  a  copper-fastened  vessel,  to  be  taken 


IMPLIED   WARRANTY   IN   SALE    BY   SAMPLE  207 

''with  all  faults,  and  without  allowance  for  any  defects  whatsoever," 
and  this  was  held  to  mean  only  all  faults  which  a  copper-fastened  ves- 
sel might  have,  the  court  saying  by  way  of  illustration:  "Suppose  a 
silver  service  sold  with  all  faults,  and  it  turns  out  to  be  plated."  So, 
in  Nichol  v.  Godts,  10  Exch.  191,  an  agreement  for  the  sale  and  de- 
livery of  certain  oil,  described  as  ''foreign  refined  rape  oil,  warranted 
only  equal  to  samples,"  was  held  to  be  not  complied  with  by  the  tender 
of  oil  which  was  not  foreign  refined  rape  oil,  although  it  might  be  equal 
to  the  quality  of  the  samples.  The  decision  of  this  case  has  stood  in 
England,  though  not  without  some  questioning  at  the  bar.  ^ce  VVieler 
v.  Schilizzi,  17  C.  B.  619;  Josling  v.  Kingsford,  13  C.  B.  (N.  S.)  447; 
Alody  v.  Gregson,  L.  R.  4  Exch.  49;  Jones  v.  Just,  L.  R.  3  Q.  B. 
197;    Randall  v.  Newson,  L.  R.  2  Q.  B.  Div.  102. 

In  the  present  case,  by  a  fair  and  reasonable  construction  of  the 
bought  note,  effect  can  be  given  to  both  of  the  phrases  used  to  describe 
the  rubber.  Construed  thus,  the  article  sold  was  ^102  bales  of  Ceara 
rubber,  of  the  second  quality,  and  as  good  as  the  samples.  The  rubber 
delivered  was  in  fact  Ceara  rubber.  There  was  no  question  that  it  was 
of  the  right  kind,  but  it  was  not  of  the  second  quality.  There  is  no 
necessity  to  disregard  the  words  describing  the  rubber  as  of  the  second 
quality.  They  signified  a  distinct  and  well-known,  though  not  abso- 
lutely uinform,  grade  of  rubber.  There  was  no  exact  standard  or  di- 
viding line  between  rubber  of  the  second  quality  and  of  the  third  qual- 
ity, any  more  than  there  is  between  daylight  and  darkness.  But  never- 
theless a  decision  may  be  reached,  and  it  may  be  easy  to  reach  it  in 
a  particular  case,  that  certain  rubber  is  or  is  not  of  the  second  quality. 
This  general  designation  being  given,  the  specification  "as  per  samples" 
being  also  included  in  the  note,  the  rubber  must  also'  be  equal  to  the 
san  ■  It  must  be  rubber  of  the  second  quality,  and  it  musl  be  equal 

to  the  samples.  If  it  fails  in  either  particular,  it  is  of  no  consequence 
that  it  conforms  to  the  other  particular.  There  is  no  inconsistency  in 
:i  a  twofold  warranty;  and,  this  rubber  having  been  found  to  be  not 
of  the  second  quality,  the  warranty  was  broken,  without  regard  to  the 
que- lion  whether  or  not  it  was  equal  to  the  samples. 

The   fact  that  the  plaintiffs  had  an  opportunity  to  examine  the  nil 
.  and  actually  made  such  lination  as  they  wished,  will  nol  n 

irily  do  .away  with  the  effecl  of  the  warrant)-.  The  plaintiffs  were 
it- . t  bound  t<>  exercise  their  skill,  having  a  warranty.  They  might  well 
(in  tin-  description  of  the  rubber,  if  they  were  content  to  accepl 
rubber  which  should  conform  \<>  thai  description.  Henshaw  v.  Rol 
9  Men-.  83,  43  \m.  Dec.  367;  Jones  v.  Just,  I..  R.  .>  Q.  I'..  197.  And 
the  exhibition  <>t'  a  sample  is  of  no  greater  effect  than  the  giving  of  an 
opportunity  to  in  peel  the  goods  in  hull:.  Nbtwith  tanding  the  sample 
or  the  inspection,  it  i-  an  implied  term  of  the  contract  that  the  goods 
shall  reasonably  an  wer  the  description  given,  in  its  commercial  sense. 
Drummond  v.  Van  fngen,  L.  R.  12  App.  Ca  .284;   Mody  v.  Gregson, 


208  CONDITIONS    AND    WARRANTIES 

L.  R.  4  Exch.  49 ;  Nichol  v.  Godts,  10  Exch.  191.  In  the  two  former 
of  these  cases  it  v  as  held  that  there  might  be,  and  that  under  the  cir- 
cumstances then  existing  there  was,  an  implied  warranty  of  merchant- 
able quality  notwithstanding  the  sale  was  by  a  sample,  which  sample 
was  itself  not  of  merchantable  quality,  the  defect  not  being  discover- 
able upon  a  reasonable  examination  of  the  sample. 

The  point  urged  in  the  defendants'  argument,  that  the  plaintiffs' 
remedy  was  destroyed  by  their  acceptance  of  the  goods,  was  not  taken 
•at  the  trial,  and  no  ruling  was  asked  adapted  to  raise  the  question  as 
to  the  effect  of  such  acceptance.  For  these  reasons,  in  the  opinion  of 
a  majority  of  the  court,  the  entry  must  be :  Exceptions  overruled. 


J.  I.  CASE  PLOW  WORKS  v.  NILES  &  SCOTT  CO. 

(Supreme  Court  of  Wisconsin,  1895.    90  Wis.  590,  63  N.  W.  1013.) 
See  ante,  p.  172,  for  a  report  of  the  case. 


t 


PEEFOEMAKCE    OF    COXTIiACT  209 


PERFORMANCE  OF  CONTRACT 
I.  In  General  x 


DAVIS  v.  GILLIAM. 
(Supreme  Court  of  Washington,  1896.     14  Wash.  206,  44  Pac.  119.) 

Action  by  A.  L.  Davis  against  Lane  C.  Gilliam  and  J.  B.  Gilliam 
for  breach  of  contract.  From  a  judgment  for  defendants,  and  an  or- 
der denying  a  new  trial,  plaintiff  appeals. 

Gordon,  J.  The  complaint  in  this  action  alleges  that  on  the  1st 
day  of  July,  1890,  the  appellant  (plaintiff  below)  was  the  owner  of 
about  800  head  of  horses,  then  on  what  is  known  as  the  "Crab  Creek 
Range"  in  the  counties  of  Adams  and  Douglas ;  that  on  that  day  he 
entered  into  a  contract  with  the  respondents,  wherein  and  whereby  he 
agreed  to  sell  and  deliver  said  horses  to  them  at  the  rate  of  $30  per 
head,  the  delivery  of  the  horses  to  be  made  at  the  fall  round-up  of 
that  year.  Four  thousand  dollars  of  the  purchase  price  was  to  be  paid 
at  the  time  of  making  the  contract,  and  the  balance  in  one,  two,  three, 
four,  and  five  years.  The  first  payment  was  to  be  made  by  promissory 
note  in  the  sum  of  $4,000,  dated  July  1,  1890,  payable  one  year  there- 
after. The  complaint  also  alleges  that  on  or  about  the  1st  of  Septem- 
ber, 1890,  the  fall  round-up  being  about  to  take  place,  appellant  notified 
the  respondents  that  he  was  ready  to  deliver  the  horses,  and  requested 
them  to  attend  at  the  range  for  the  purpose  of  receiving  them  as 
counted,  and  that  at  that  time  he  was  ready  to  deliver  the  same  and 
proceed  with  the  contract,  but  that  the  respondents  neglected  and  re- 
fused to  receive  or  accept  the  horses,  or  proceed  any  further  with  the 
contract;  that,  at  the  time  of  the  occurrence  of  the  breach,  the  band 
of  horses  were  not  worth  to  exceed  $10,000  in  value. 

The  respondents  answered,  denying  the  several  allegations  of  the 
complaint,  and  alleging  affirmatively  that  they  were  induced  to  enter 
into  an  agreement  whereby  the  appellant  agreed  to  deliver  800  horses 
of  a  certain  kind  and  description  ton  pondents  on  the  1st  day  of  Sep- 
tember, L890,  for  which  horses  they  .  I  to  pay  $30  per  head;  that 
on  the  1st  day  of  September  thereafter  they  were  ready  and  willing  to 
ive  and  accept  the  horses  in  accordance  with  the  terms  of  their 
contract  of  purchase,  and  for  thai  purpose  attended  at  the  range  wl 
said  horses  were  located,  but  thai  the  appellant  did  not  at  that  time 
deliver  or  offer  to  deliver  said  hor  C  .  or  any  of  them;    and,  further, 

lFor  discussion  of  principles,  Bee  Tiffany,  Bales  (2d  Ed.)  f§  80,  8L 

( tool  kv  I '  L0K6  Sai.f.h — 14 


210  PERFORMANCE  OF  CONTRACT 

that  the  representations  of  the  appellant  as  to  the  description  and  kind 
of  horses  which  he  pretended  to  own,  and  to  he  ahle  to  sell  and  de- 
liver to  respondents,  were  false  and  fraudulent,  etc. 

The  trial  resulted  in  a  verdict  for  the  respondents,  and  from  an  or- 
der denying  his  motion  for  a  new  trial,  and  from  judgment  upon  the 
verdict,  the  plaintiff  has  appealed. 

The- sole  ground  relied  upon  for  a  reversal  is  that  the  court  erred 
in  its  charge  to  the  jury,  and  in  refusing  to  give  particular  instructions 
requested  hy  the  appellant.  The  respondents,  while  not  conceding  that 
any  error  was  committed  by  the  trial  court  cither  in  giving  the  instruc- 
tions complained  of  or  in  refusing  to  give  others  as  requested  by  appel- 
lant, insist  that  the  verdict  is  right  under  the  evidence,  and  that  the 
appellant  failed  to  show  any  offer  or  readiness  to  deliver  the  horses 
in  pursuance  of  the  agreement ;  and,  further,  that  it  affirmatively  ap- 
peared from  the  testimony  that  he  was  not  in  possession  of  the  horses 
either  at  the  time  of  the  contract  or  at  the  time  provided  therein  for  a 
delivery  of  the  horses,  nor  until  nearly  a  year  thereafter.  "It  is  the 
practice  of  most  of  the  courts,  before  passing  upon  exceptions  to  in- 
structions, to  look  into  the  evidence,  and  see  if  the  verdict  was  right, 
and,  if  it  is  found  to  be  so,  the  court  will  look  no  further."  Thomp. 
Trials,  §  2403,  and  authorities  there  cited.  After  a  careful  examina- 
tion of  the  entire  record,  we  have  reached  the  conclusion  that  this  con- 
tention of  respondents  must  be  upheld.  While  detached  portions  might 
be  construed  otherwise,  still,  when  considered  as  a  whole,  the  testi- 
mony clearly  and  unmistakably  shows  that  the  appellant  was  never  in  a 
position  to  carry  out  his  contract  by  delivering  the  horses  prior  to 
July,  1891,  and  that  in  the  meantime  about  100  of  the  band  had  been 
shipped  out  of  the  state,  and  disposed  of. 

Appellant's  own  testimony  shows  that,  at  the  time  of  entering  into 
the  contract,  the  horses  were  in  the  possession  of  one  Glasspoole,  who 
claimed  an  interest  in  them ;  that  one  of  the  respondents,  at  Appellant's 
request,  accompanied  appellant  to  the  range  where  the  horses  in  ques- 
tion were  located  at  or  about  the  time  of  the  round-up,  but  that  appel- 
lant was  unable  to  deliver  any  of  the  horses  to  respondents  at  that  time 
because  of  the  refusal  of  Glasspoole  to  surrender  possession  of  them  ; 
that  thereupon  they  returned  to  the  city  of  Spokane,  distant  some  75 
miles  from  the  range,  where,  on  the  27th  day  of  August,  1890,  the  ap- 
pellant entered  into  a  written  contract  with  Glasspoole,  a  copy  of  which 
contract  was  attached  to  the  deposition  of  Glasspoole,  and  put  in  evi- 
dence by  appellant.  This  contract  recited  that  the  property,  to  wit,  "a 
certain  band  of  horses,  supposed  to  contain  about  800  head,  *  *  * 
now  on  the  Crab  Creek  range,  etc.,  are  part  of  the  same  band  and  its 
increase  bought  by  the  first  and  second  parties  [Glasspoole  being  party 
of  the  first  part,  and  the  appellant  party  of  the  second  part,  to  said 
contract]  and  John  Davis  from  J.  L.  Dow,"  etc.  In  said  contract  said 
Glasspoole  agreed  to  sell  his  interest  in  and  to  said  property  to  the  ap- 


DELIVERY    OF   WRONG    QUANTITY  211 

pellant,  in  consideration  of  the  appellant's  delivering  to  Glasspoole  re- 
spondents' note  for  $4,000,  and  a  bond  of  appellant  with  sufficient  sure- 
ties to  insure  the  prompt  payment  to  said  Glasspoole  of  said  note  at 
maturity.  This  contract  also  provided  that  Glasspoole  should  remain 
in  possession  of  the  horses  until  their  exact  number  should  be  ascer- 
tained by  counting,  etc.,  and  until  payment  was  made  as  therein  pro- 
vided. It  further  appears  from  the  testimony  of  appellant  that  the 
$4,0w0  note  (executed  by  respondents),  which,  under  the  terms  of  the 
contract  with  Glasspoole,  appellant  was  required  to  deliver  to  Glass- 
poole before  he  could  obtain  possession  of  the  horses,  was  at  that  time 
held  by  the  First  National  Bank  of  Walla  Walla,  where  appellant  had 
theretofore  pledged  it  as  collateral  to  his  own  note  for  something  over 
$3,000 ;  and  it  further  appears  that,  up  to  the  time  of  the  trial,  he  had 
not  procured  the  return  of  said  $4,000  note ;  and  that  Glasspoole  con- 
tinued in  the  possession  of  all  of  the  horses  until  July,  1891,  in  the 
meantime  shipping  about  100  of  the  horses  out  of  the  state  to  the  state 
of  Illinois,  where  they  were  sold. 

Such  was  the  condition  of  the  case  made  by  the  appellant.  It  seems 
plain  that,  to  entitle  the  appellant  to  a  recovery,  the  testimony  should 
have  shown  an  ability  upon  his  part  to  deliver  the  horses  in  question 
in  accordance  with  the  terms  of  the  contract.  The  undisputed  proof, 
as  we  think,  however,  shows  that  he  was  wholly  unable  to  make  a  de- 
livery because  of  the  interest  which  Glasspoole  owned  in  the  horses, 
coupled  with  his  refusal  to  surrender  possession  of  them.  It  follows 
that,  if  any  error  was  committed  in  the  charge  of  the  court,  it  was 
wholly  immaterial.  It  is  a  familiar  rule  that  a  good  verdict  cures  all 
errors  and  irregularities  in  the  proceedings,  and  that  errors  growing 
out  of  a  charge  are  always  to  be  disregarded  when  "the  verdict  is  so 
plainly  in  accordance  with  the  evidence  that  it  follows  as  a  conclusion 
of  law  thereon."  Thomp.  Trials,  §  2403.  It  appearing  to  us,  From  a 
consideration  of  the  entire  record,  that  substantial  justice  has  been 
done,  the  judgment  appealed  from  will  be  affirmed. 


II.  Delivery  of  Wrong  Quantity 


BR<  iWNFIELD  v.  J<  'NX'S'  »\T. 
(Supreme  Court  <>f  Pennsylvania,  1889.    128  Pa.  264,  L8  ah  543,  6  L.  i:   A.  18.) 
See  ante,  p.  108,  for  a  report  of  the 

i  i  or  discussion  of  principles,  see  Tiffany,  Bales  (2d  Ed.)  H  86-88. 


212  PERFORMANCE  OF  CONTRACT 


III.  Delivery  by  Installments 


PROVIDENCE  COAL  CO.  v.  COXE. 
(Supreme  Court  of  Rhode  Island,  1S9G.     19  R.  I.  3S0,  582,  35  Atl.  210.) 

Action  by  the  Providence  Coal  Company  against  Coxe  Bros.  &  Co. 
Judgment  for  plaintiff.    Defendants  move  for  a  new  trial. 

Matteson,  C.  J.  This  is  assumpsit  on  a  written  contract,  of 
which  the  following  is  a  copy :  "Providence,  July  2nd,  1892.  Sold 
Providence  Coal  Co.,  to  be  shipped  to  Providence,  R.  I.,  10,000  tons 
Beaver  Meadow  pea  coal,  @  $1.85  per  ton  f.  o.  b.  Cash,  30  days. 
Not  insured.  To  be  shipped,  viz. :  Barge  load  immediately ;  bal- 
ance in  equal  monthly  proportions  before  Feby.  1st,  1893;  subject, 
however,  to  strikes,  or  any  other  unavoidable  delay  caused  in  shipping 
same.  Coxe  Bros.  &  Co.,  per  F.  J.  Hartshorne."  A  jury  trial  was 
waived,  and  the  case  heard  by  the  common  pleas  division.  Decision 
in  favor  of  the  plaintiffs  was  given  for  a  part  of  their  claim,  where- 
upon the  defendants  filed  their  petition  for  a  new  trial,  alleging  that 
the  decision  was  erroneous. 

We  think  the  common  pleas  division  erred  in  holding  the  contract 
to  be  severable.  It  is  a  single  contract  for  the  sale  of  one  entire  quan- 
tity of  coal,  to  wit,  10,000  tons.  The  subsidiary  provisions  relative 
to  shipments  and  payment  did  not  have  the  effect  to  split  it  into  as 
many  distinct  contracts  as  there  were  to  be  separate  shipments  or  de- 
liveries. Norrington  v.  Wright,  115  U.  S.  188,  204,  6  Sup.  Ct.  12,  29 
L.  Ed.  366;  Iron  Co.  v.  Naylor,  9  App.  Cas.  434.  The  common  pleas 
division  found,  on  the  evidence,  that  the  plaintiffs,  though  constantly 
urged  by  the  defendants  to  furnish  barges  for  the  transportation  of 
the  coal  according  to  the  custom  and  course  of  dealing  between  them, 
or  to  allow  the  defendants  to  procure  barges  for  that  purpose  for  the 
plaintiffs,  did  not  do  so,  and  did  not  take  the  coal  which  was  by  the 
terms  of  the  contract  to  be  shipped  in  the  months  of  July,  August, 
September,  October,  and  November,  but  received  only  572.2  tons  out 
of  the  proportions  for  those  months,  shipped  with  an  installment  of 
coal  purchased  under  a  former  contract. 

We  think  that  each  neglect  of  the  plaintiffs  to  take  the  shipments 
of  coal  for  the  months  mentioned  was  a  breach  of  the  contract  which 
warranted  the  defendants  in  canceling  it,  in  the  absence  of  facts  tend- 
ing to  show  a  waiver  of  the  right  of  the  defendants  to  insist  upon  such 
breaches,  or  some  legal  justification  on  the  part  of  the  defendants  for 
such  breaches.  King  Philip  Mills  v.  Slater,  12  R.  I.  82,  90,  34  Am. 
Rep.  603.    The  declaration,  which  consists  of  a  single  count,  avers  no 

*  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  $  89. 


DELIVERY    BY   INSTALLMENTS  213 

facts  showing,  or  tending  to  show,  a  waiver  by  the  defendants  of  their 
right  to  insist  on  the  cancellation  of  the  contract  for  the  failure  of 
the  plaintiffs  to  take  the  proportions  of  coal  stated,  nor  any  legal  ex- 
cuse for  the  failure,  but  avers  a  readiness  and  willingness  at  all  times, 
of  the  plaintiffs,  to  receive  and  pay  for  the  coal  according  to  the  con- 
tract. This  affirmation  of  the  declaration  being  negatived  by  the  evi- 
dence, and  the  plaintiffs  themselves  having  been  in  default,  it  is  clear 
that  they  were  not  entitled  to  recover  damages  for  the  refusal  of  the 
defendants  to  ship  the  proportions  of  coal  for  the  months  of  December 
and  January. 

We  think  the  common  pleas  division  erred  in  its  decision  awarding 
such  damages.  New  trial  granted,  and  case  remitted  to  the  common 
pleas  division. 

On  Rehearing. 

The  case  which  the  plaintiffs  seek  to  raise  by  their  reargument,  and 
which  they  also  attempted  to  make  on  the  original  hearing,  is  not  the 
case  made  by  the  declaration.  Our  opinion  was  rendered  on  the  dec- 
laration as  it  is  framed.  The  declaration  avers  a  readiness  and  willing- 
ness of  the  plaintiffs  at  all  times  to  receive  the  installments  of  coal 
which  the  contract  required  them  to  receive,  and  claims  damages  for 
the  refusal  of  the  defendants  to  deliver  the  coal  according  to  the  con- 
tract. The  common  pleas  division  found,  on  the  evidence,  that,  though 
constantly  urged  by  the  defendants  to  take  the  coal  to  be  shipped  in 
July,  August,  September,  October,  and  November,  1892,  the  plaintiffs 
neglected  to  do  so,  and  received  but  a  small  portion  of  one  install- 
ment, shipped  with  coal  under  a  former  contract.  The  plaintiffs  thus 
being  in  default,  we  held  that  on  the  declaration,  as  framed,  averring 
their  readiness  and  willingness  at  all  times  to  receive  the  coal  accord- 
ing to  the  contract,  and  claiming  damages  generally  as  for  an  entire 
eh  of  the  contract,  they  were  not  entitled  to  recover  for  the  re- 
fusal of  the  defendants  to  ship  the  installments  of  coal  for  the  months 
of  December,  1S92,  and  January,  1893. 

We  no  reason  to  change  our  decision.     It  seems  to  us  that,  to 

raise  the  question  which  the  plaintiffs  seek  to  raise,  the  declaration 
ild  set  forth  that  though  the  plaintiffs  neglected  to  send  for  and  re- 
ceive the  coal  required  to  be  shipped  during  July,  August,  September, 
October,  and  November,  1892,  and  though  the  defendants  were  entitled 
to  rescind  the  contract  on  that  account,  they  nevertheless  did  not  rescind 
it,  but  treated  it  as  continuing  in  force,  and  therefore  were  bound  to 
deliver  to  r  on  their  demand,  the  installments  of  coal  for 

ember,  L892,  and  January,  1893,  and  that,  though  the  plaintiffs 
demanded  the  installment  which  the  defendants  v,  i  bound  to  de- 

liver in  December,  1892,  the  defendants  refused  to  deliver  the  same, 
and  to  deliver  any  real  under  the  contract,  etc. 

The   plaintifl  the  averment  in   the  declaration  of  a 

readiness  and  willingness  on  their  part   to  receive  the  coal  may  bi 


214  PERFORMANCE  OF  CONTRACT 

regarded  as  immaterial,  and  rejected  as  surplusage.  We  do  not  think 
that  it  can  be  so  treated.  The  declaration  proceeds  on  the  theory  that 
the  contract  was  an  entire  contract.  In  that  view,  the  averment  of  a 
readiness  and  willingness  to  receive  the  coal,  or,  in  other  words,  to 
perform  the  contract  by  the  plaintiffs,  was  a  condition  precedent  to 
the  right  to  recover.  The  case  which  the  plaintiffs  now  seek  to  estab- 
lish is  that  the  contract,  though  an  entire  contract,  is  so  far  separable 
that  its  installments  or  deliveries  may  be  treated  as  separate  or  inde- 
pendent stipulations  of  the  contract,  so  that  the  plaintiffs  are  entitled 
to  sue,  notwithstanding  the  fact  that  they  were  not  ready  and  willing  to 
perform  the  entire  contract  on  their  part,  for  such  of  the  installments 
as  they  had  been  ready  and  willing  to  receive,  because  the  plaintiffs 
had  not  elected  to  treat  the  contract  as  at  an  end,  and  had  not  rescinded 
it,  before  the  demand  by  the  plaintiffs  for  an  installment  of  the  coal 
deliverable  under  the  contract  at  the  time  of  the  demand. 


CRESSWELL  RANCH  &  CATTLE  CO.  v.  MARTINDALE. 

(Circuit  Court  of  Appeals,  Eighth  Circuit,  1S91.     63  Fed.  84,  11  C.  C.  A.  33.) 

In  Error  to  the  Circuit  Court  of  the  United  States  for  the  Western 
District  of  Missouri. 

Action  by  William  Martindale  and  Thomas  J.  Price  against  the 
Cresswell  Ranch  &  Cattle  Company,  Limited,  for  a  breach  of  contract 
to  deliver  cattle.  The  district  court  rendered  a  decree  for  the  plain- 
tiffs.    Defendant  appeals. 

Before  Caldwell  and  Sanborn,  Circuit  Judges,  and  Thayer, 
District  Judge. 

Sanborn,  Circuit  Judge.  If  the  vendee  of  personal  property,  to 
be  delivered  and  paid  for  in  installments,  refuses,  upon  the  demand 
of  the  vendor,  to  accept  and  pay  for  a  substantial  part  of  an  install- 
ment according  to  the  contract,  will  the  fact  that  he  does  so  in  good 
faith,  and  in  the  belief  that  he  is  not  required  by  the  contract  to  receive 
any  of  the  property  so  rejected,  deprive  the  vendor  of  his  right  to 
refuse  to  further  perform  the  contract  on  his  part?  This  is  the  prin- 
cipal question  presented  by  this  case. 

September  19,  1892,  the  Cresswell  Ranch  &  Cattle  Company,  Lim- 
ited, a  corporation,  the  plaintiff  in  error,  sold  to  William  Martindale 
and  Thomas  J.  Price,  the  defendants  in  error,  5,021  steers,  1,321  of 
which  were  to  be  delivered  not  later  than  October  20,  1892,  and  the 
remaining  3,700  at  the  rate  of  1,000  each  week,  commencing  October 
24,  1892.  The  vendees  agreed  to  pay  $28  per  head  for  the  cattle,  and 
at  the  date  of  the  contract  paid  $5,000,  which  was  to  be  applied  to 
the  pavment  for  the  cattle  as  they  were  delivered  at  the  rate  of  $1 
per  head.  The  3,700  cattle  were  part  of  a  herd  of  cattle  owned  by 
the  vendor  that  was  on  a  range  in  Texas,  40  miles  square,  and  the 


DELIVERY   BY   INSTALLMENTS  215 

contract  provided  that  when  any  installment  of  these  cattle  was  ready 
to  load  upon  the  cars  the  vendees  should  he  notified,  and  might  cut 
out  any  of  the  steers  gathered  that  did  not  weigh  900  pounds.  After 
the  1.321  cattle  and  two  installments  of  the  3,700  had  been  delivered 
and  paid  for,  making  in  all  2,2S9  steers,  the  parties  met  on  November 
14,  1892,  for  the  fourth  delivery,  and  the  vendor  tendered,  and  de- 
manded that  the  vendees  should  receive,  980  steers  that  weighed  over 
900  pounds  each,  and  that  complied  with  the  other  requirements  of 
the  contract.  The  vendees  cut  out  and  refused  to  accept  or  pay  for 
282  of  these  cattle,  on  the  ground  that  they  did  not  weigh  900  pounds 
each,  but  accepted  and  paid  for  the  remaining  698.  Before  the  time 
for  another  delivery  arrived,  the  vendor  notified  the  vendees  that  they 
had  violated  the  contract  on  their  part  by  rejecting  the  282  steers, 
and  that  the  cattle  company  would  deliver  no  more  cattle  to  them  there- 
under. The  vendees  then  brought  this  suit  for  damages  for  the  fail- 
ure of  the  vendor  to  deliver  the  remainder  of  the  cattle  specified  in 
the  contract,  and  for  the  balance  of  the  $5,000  not  yet  applied  to  the 

merit  for  the  cattle  already  delivered.  The  vendor  answered  that 
the  vendees  had  committed  the  first  breach  by  failing  to  receive  and 
pay  for  the  282  cattle  tendered  November  14,  1892. 

At  the  close  of  the  trial  the  court  instructed  the  jury,  in  effect,  that 
the  mere  fact  that  the  vendees  refused  to  accept  the  steers  that  com- 
plied with  the-  contract  on  November  14,  1892,  did  not  relieve  the 
vendor  of  its  obligation  to  make  tender  of  the  remainder  of  the  5,021 
steers  due  under  the  contract,  if  the  jury  further  found  that  the  ven- 
dees made  the  rejection  in  good  faith,  in  the  belief  that  the  rejected 
steers  did  not  come  up  to  the  requirements  of  the  contract.  The  court 
also  refused  to  charge,  as  requested  by  the  vendor,  that  the  rejection 
of  these  steers  entitled  it  to  treat  this  action  as  a  breach  of  the  con- 
tract, and  that,  if  the  vendor  notified  the  vendees  that  it  so  elected  in 
a  reasonable  time  after  the  rejection,  the  latter  could  not  recover.  The 
court  also  instructed  the  jury  that,  although  they  found  that  the  vendor 
tendered  and  the  vendees  refused  to  accept  cattle  that  fulfilled  the 
requirements  of  the  contract,  yet,  if  the  vendor  had  subsequently 
waived  that  breach  of  the  contract,  the  vendees  could  recover  dam. 
for  the  failure  of  the  vendor  t<>  make  the  subsequent  deliveries.  There 
was  a  verdict  and  judgment  for  the  vend  or  damages  for  the  fail- 
ure of  the  vendor  to  deliver  th<  dm-  subsequent  to  Nbvi  mbi  r  II. 

1.     tint  the  jury  found  that  tin-  282  st<  ndered  and  rejected 

on  thai  day  fulfilled  the  requirements  <>f  the  contract,  and  gave  the 
vend  "ii  account  of  th  The  verdicl  does  not 

hether  the  jury  found  that  the  vendees'  breach  of  the  eon 

I    on    November    II.    1892,    \\  use    they    made    it    in 

■  \  faith  or  because  the  vendor  had  waived  it. 
The  contracl  on  which  this  action  was  based  was  an  entire  contract. 
It  was  a  contract   for  the  £  5,021  cattle  for  $140,588,  and  the 

aid  at  the  time  the  contract  Was  in. ide  was  paid 


-16  PERFORMANCE    OF    CONTRACT 

on  account  of  the  entire  purchase.  The  subsidiary  provisions  of  the 
contract,  that  the  price  was  $28  for  each  steer,  and  that  there  were  to 
be  five  deliveries  of  the  cattle,  no  more  made  as  many  contracts  of 
this  one  as  there  were  to  be  installments  of  cattle  delivered  than  it 
made  as  many  as  there  were  cattle  to  be  delivered.  Norrington  v. 
Wright,  115  U.  S.  188,  203,  6  Sup.  Ct.  12,  29  L.  Ed.  366;  Iron  Co. 
v.  Nay  lor,  9  App.  Cas.  434,  439.  Nor  was  the  vendees'  breach  of 
this  contract  slight  or  in  an  immaterial  part.  It  was  substantial,  and 
went  to  the  very  root  of  the  contract.  It  consisted  in  their  refusal  to 
accept  282  cattle,  and  to  pay  $7,896  for  them,  at  the  time  and  place 
they  agreed  to  accept  and  pay  for  them  under  the  contract.  These 
cattle  had  been  gathered  by  the  vendor  from  a  range  40  miles  square 
by  the  labor  of  many  men  for  many  days  and  driven  near  to  the  rail- 
road station  to  be  delivered  to  the  vendees.  Their  refusal  to  take 
them  imposed  upon  the  vendor  the  necessity  of  gathering  other  cattle 
from  this  extended  range  in  the  same  manner  to  carry  out  its  contract 
in  the  face  of  the  fact  that  the  vendees  had  refused  to  accept  nearly 
three  hundred  cattle  that  complied  with  its  provisions.  '  A  plaintiff 
cannot  maintain  his  action  for  the  breach  of  a  contract  made  with  him 
by  a  defendant  unless  he  can  establish  such  performance  on  his  part 
as  will  entitle  him  to  demand  performance  of  the  defendant.  A  prior 
substantial  breach  of  the  contract  on  the  plaintiff's  part  is  ordinarily 
a  conclusive  answer  to  an  action  for  a  subsequent  breach  on  the  de- 
fendant's part.  In  their  complaint  the  vendees  recognized  this  prin- 
ciple, and  alleged  that  they  "have  in  all  things  kept  and  performed 
the  said  contract  upon  their  part,"  but  that  the  cattle  company,  on 
November  19,  1892,  refused  to  perform  on  its  part. 

The  verdict  does  not  rest,  however,  upon  proof  of  this  prior  perform- 
ance on  the  part  of  the  vendees,  but  upon  the  facts  that,  before  they 
charge  any  breach  upon  the  cattle  company,  they  had  themselves  failed 
to  perform  a  substantial  part  of  the  contract,  but  that  they  then  in 
good  faith  believed  that  they  were  not  so  failing.  Nor  was  this  exer- 
cise of  good  faith  and  belief  by  mistake,  or  without  notice  of  the 
fact.  It  was  a  willful  and  determined  exercise  of  faith.  The  vendor 
insisted,  at  the  time,  that  these  cattle  weighed  over  900  pounds  each, 
weighed  some  of  them  in  the  presence  of  one  of  the  vendees  on  some 
defective  scales  that  indicated  that  its  claim  was  well  founded,  and 
demanded  that  the  vendees  should  accept  them.  All  this  may  not 
have  demonstrated  the  weight  of  the  cattle,  though  it  seems  to  have 
proved  it  to  the  satisfaction  of  the  jury,  but,  although  the  judgment 
of  the  vendor's  agent  was  liable  to  be  at  fault,  and  although  the  scales 
were  defective,  this  was  ample  warning  to  the  vendees  to  determine 
the  weight  of  these  cattle  in  some  way  correctly  before  they  rejected 
them.  They  had,  by  the  express  terms  of  the  contract,  reserved  to 
themselves  the  exclusive  privilege  of  rejecting  cattle  that  did  not  in 
fact  weight  900  pounds,  and  by  that  very  provision  they  had  imposed 


DELIVERY   BY   INSTALLMENTS  217 

upon  themselves  the  duty  of  determining  the  fact,  and  of  rejecting, 
at  their  peril,  those  whose  weight  exceeded  that  amount. 

The  provision  of  the  contract  which  presents  this  question  is  that 
the  vendees  may  cut  out  "any  objectionable  steer  that  may  not  weigh 
900  pounds."  It  was  perfectly  competent  for  these  parties  to  this  con- 
tract to  have  provided  in  it  that  the  vendees  might  cut  out  and  reject 
any  steer  that  in  their  judgment  weighed  less  than  900  pounds,  or 
any  steer  that  they  in  good  faith  believed  weighed  less  than  900  pounds. 
This  they  did  not  do.  They  provided  that  the  vendees  might  cut  out 
those  steers  'that  in  fact  weighed  less  than  900  pounds  each.  There 
is  a  well-known  and  accurate  standard  and  method  for  measuring  the 
weight  of  cattle  and  most  mercantile  commodities,  and  contracting 
parties  know  when  they  make  their  contracts  what  the  standard  is, 
and  what  the  method  is,  and  that  neither  of  them  will  probably  change. 
But  there  is  no  accurate  test,  standard,  or  method  by  which  the  belief 
of  vendees  as  to  the  weight  of  the  articles  they  purchase  can  be  meas- 
ured, and  no  one  can  know  in  advance  what  such  a  belief  may  be. 
The  belief  of  the  defendants  in  error  in  this  case  was,  according  to 
the  verdict  of  the  jury,  too  far  from  the  fact  to  authorize  its  substi- 
tution in  this  contract  for  the  actual  weight,  for  out  of  980  cattle  that 
weighed  over  900  pounds  each  they  believed  that  more  than  28  per 
cent,  of  them  weighed  less.  To  substitute  in  this  contract,  for  the 
actual  weight,  the  judgment  or  belief  in  good  faith  of  the  vendees 
on  that  subject  as  the  standard  by  which  to  determine  what  steers 
were  heavy  enough  to  comply  with  the  terms  of  the  contract,  would 
be  to  make  a  new  contract  for  these  parties, — a  contract  they  neither 
made  nor  intended  to  make,  and  one  which  the  verdict  shows  would 
have  been  far  more  beneficial  to  the  vendees  than  was  the  actual 
contract.     It  is  not  claimed  that  this  can  be  done. 

But  it  is  insisted  that,  although  the  good  faith  and  belief  of  the 
vendees  cannot  be  made  the  standard  to  determine  the  exi         e  of 
the  breach  of  this  contract,  yet  they  may  be  interposed  to  deprive  that 
breach  of  some  of  its  ordinary  legal  effects.     But  that  as  effectually 
makes  a  new  contract  for  the  parties  as  to  substitute  the  vendees'  bi 
as  to  the  weight  for  the  actual  weight.     The  established  rights  and 
remedies  for  the  breach  (if  an  agreement  are  as  effectually  contra* 
for  as  the  performance  of  the  acts  stipulated.     One  of  the  rights 
of  the  vendor  under  this  contract  was  to  refuse  to  perform  sul 
quenl  acts  stipulated  after  the  vendees  had  refused  to  perform  a  sub- 
stantia] part  of  the  contracl  on  their  part.    This  right  is  given  by  the 
law   for  hi,  protection  to  the  party  i<>  a  contracl  againsl   whom  the 
first  breach  I1  n  committed.     No  sound  rea  on  occurs  t<>  us  why 

its  -  made  dependenl  <>ii  the  l; 1   faith  or  belief 

of  him  who  firsl  breaks  the  ■  '  >n  the  other  hand,  there  are 

■  nt  p  i  ontrary. 

First.  It   i    the  breach  itself,  and  not  tli.  1   faith  or  belief 

the  party  who  commits  it,  thai  i  and  mea  ures  the  damage  of 


218  PERFORMANCE  OF  CONTRACT 

the  injured  party.  The  injury  to  the  vendor  in  the  case  before  us 
was  not  less  because  the  vendees  broke  the  contract  in  good  faith,  in 
the  belief  that  they  were  not  breaking  it.  Nor  did  the  fact  that  they 
broke  it  in  good  faith,  in  the  belief  that  they  were  complying  with  it, 
raise  any  presumption  that  they  would  not  continue  to  do  so.  On  the 
other  hand,  this  fact  presented  the  guaranty  of  word  and  of  act  that 
i hey  would  continue  to  break  it. 

Second.  The  rights  and  remedies  of  parties  for  breaches  of  civil 
contracts  ought  not  to  depend  on  the  good  faith  and  belief  of  those 
who  violate  them,  because  these  are  so  difficult  to  ascertain.  The 
proof  of  the  existence  or  absence  of  such  good  faith  and  belief  is 
peculiarly  within  the  knowledge  and  control  of  the  violators  them- 
selves. Frequently  they  alone  know  what  they  believe,  and  whether 
or  not  they  are  acting  in  good  faith.  It  would  always  be  difficult, 
and  often  impossible,  to  establish  their  bad  faith  or  their  belief  that 
they  were  violating  their  contracts,  without  their  testimony,  and  gen- 
erally impossible  to  do  so  with  it.  The  rights  and  remedies  of  par- 
ties for  the  breach  of  civil  contracts  ought  not  to  be  so  placed  at  the 
mercy  of  those  who  break  them.  It  would  be  intolerable  that  parties 
to  continuing  contracts  should  be  compelled  to  perform  them  on  their 
part  until  they  could  prove  that  the  other  contracting  parties,  who 
were  constantly  breaking  them,  were  doing  so  in  bad  faith,  and  in 
the  belief  that  they  had  no  right  to  do  so. 

Our  conclusion  is  that  the  right  of  a  party  to  a  continuing  con- 
tract to  refuse  to  make  subsequent  performance  on  his  part,  after 
the  other  contracting  party  has  refused,  upon  full  notice  and  demand, 
to  perform  a  substantial  part  of  the  contract  on  his  part,  is  not  de- 
pendent on  the  good  faith  of  the  latter,  nor  on  his  belief  that  he  is 
not  violating  the  contract,  but  rests  solely  upon  the  fact  whether  or 
not  he  has  violated  or  failed  to  perform  a  substantial  part  of  the 
contract  that  the  agreement  required  him  to  perform.  Norrington  v. 
Wright,  115  U.  S.  188,  204,  205,  6  Sup.  Ct.  12,  29  L.  Ed.  366;  Filley 
v.  Pope,  115  U.  S.  213,  6  Sup.  Ct.  19,  29  L.  Ed.  372;  Rolling-Mill 
v.  Rhodes,  121  U.  S.  255,  261,  264,  7  Sup.  Ct.  882,  30  L.  Ed.  920; 
Beck  &  Pauli  Lithographing  Co.  v.  Colorado  Milling  &  Elevator  Co., 
3  C.  C.  A.  248,  52  Fed.  700,  703,  10  U.  S.  App.  465,  470;  Philip  Mills 
v.  Slater,  12  R.  I.  82,  34  Am.  Rep.  603 ;  Smith  v.  Lewis,  40  Ind.  98 ; 
Hoare  v.  Rennie,  5  Hurl.  &  N.  19;  Pope  v.  Porter,  102  N.  Y.  366, 
371.  7  N.  E.  304;  Dwinel  v.  Howard,  30  M)e.  258;  Robson  v.  Bohn, 
27  Minn.  333,  344,  7  N.  W.  357;  Reybold  v.  Voorhees,  30  Pa.  116, 
121;  Stephenson  v.  Cady,  117  Mass.  6,  9;  Branch  v.  Palmer,  65  Ga. 
210;  Fletcher  v.  Cole,  23  Vt.  114,  119. 

In  Norrington  v.  Wright,  supra,  most  of  the  authorities  cited  by 
counsel  for  the  defendants  in  error  in  this  case  in  support  of  their 
contention  that  the  failure  of  the  vendees  to  accept  a  part  of  one 
installment  of  the  cattle  would  not  authorize  the  vendor  to  refuse  to 
make   the   subsequent  deliveries,   are   carefully   reviewed,   and   disap- 


DELIVERY   BY    INSTALLMENTS  2l'J 

proved  or  distinguished  from  cases  like  that  hefore  us.  It  would 
be  idle  to  review  them  here  again.  In  that  case  5.000  tons  of  iron 
rails  were  sold  to  be  shipped  at  the  rate  of  about  1,000  tons  per 
month.  The  vendor  shipped  400  tons  the  first  month  and  885  tons  the 
second,  when  the  defendant  refused  to  accept  the  rails,  because  the 
shipments  had  been  less  than  1,000  tons  per  month.  The  vendor 
shipped  the  remainder  of  the  rails,  and  sued  for  damages  for  the  fail- 
ure of  the  vendee  to  accept  them.  The  supreme  court  held  that  he 
could  not  recover,  and  stated  the  rule  to  be:  "A  statement  descriptive 
of  the  subject-matter,  or  of  some  material  incident,  such  as  the  time 
or  place  of  shipment,  is  ordinarily  to  be  regarded  as  a  warranty,  in 
the  sense  in  which  that  term  is  used  in  insurance  and  maritime  law ; 
that  is  to  say,  a  condition  precedent,  upon  the  failure  or  nonperform- 
ance of  which  the  party  aggrieved  may  repudiate  the  whole  contract." 

An  attempt  is  made  to  distinguish  this  case  from  that  at  bar,  be- 
cause in  the  former  the  default  occurred  in  the  delivery  of  the  first 
installment,  and  in  the  latter  in  the  acceptance  of  the  fourth  install- 
ment. But  it  is  a  distinction  without  any  substantial  difference.  The 
reason  why  the  vendor  could  not  recover  in  Norrington  v.  Wright 
was  that  he  had  committed  the  first  breach  of  the  contract,  and  that 
relieved  the  vendee  from  subsequent  performance  on  his  part.  For 
the  same  reason  the  breach  committed  November  14,  1892,  relieved 
the  cattle  company  from  any  subsequent  performance  on  its  part.  If 
a  default  on  the  first  installment  by  one  party  relieves  the  other  < 
tracting  party  from  the  performance  of  all  the  stipulations  of  the 
contract,  by  so  much  the  more  will  a  default  on  a  later  installment 
relieve  him  from  all  subsequent  performance.  It  is  the  first  breach 
which  he  commits,  and  not  the  number  of  the  particular  installment 
to  which  it  relates,  that  defeats  the  plaintiff,  in  these  actions.  Thus 
in  Robson  v.  Bohn,  supra,  a  contract  was  made  May  19,  1873,  for  the 
sale  of  425,000  feet  of  lumber,  to  be  delivered  at  the  rate  of  20,000 
per  week  from  the  date  of  the  contract,  and  the  defendant  agreed 
to  give  his  promissory  note  for  $3,000  at  that  time,  to  pay  $2,000  in 
h  August  1,  1873,  and  to  pay  the  balance  on  the  full  delivery  of 
the  lumber.  ive   his   note   for   $.3,000.     The   vendor   delivered 

the  lumber  weekly  until  August  1,  1873.     The  vendee  then   failed  to 
pay   the  $2,<      :  in  cash,  and  the  court  held  thai   the  refusal  of 
vendee  to  pay  thi  the  vendor  Erom  the  delivery  of  any 

lumber  subsequent  ti  To  the  same  i  are  Dwinel  v. 

Howard  and  Id  v.  Vborhees,  supra.     The  rul  neral  I 

he  who  commits  the  ubstantial  breach  of  a  contract  cannol 

tain  an  action  again  other  contracting  pari  lent 

failure  to  perform,  and  it  rules  this  ca  e. 

Finally,  il  i  the  cattle  company  waived  the  breach 

committed  by  the  vendee  ,  and  that,  even  it'  there  in  the 

ruction  we  ha  ■.  il   ••> a    error  without  prejud 

and  the  judgment  should  be  affirmed.     The  claim  of  a  waivi 


1'L'O  PERFORMANCE    OF    CONTRACT 

upon  the  fact  that  the  cattle  company  received  payment  November 
14,  1892,  for  the  698  cattle  that  the  vendees  accepted,  and  the  claim 
that  its  agent  then  told  the  vendees  to  come  at  some  later  date  for 
more  cattle,  and  arrange  to  gather  and  deliver  them.  It  is  difficult 
to  see  how  the  cattle  company  waived  any  of  its  rights  by  insisting 
upon  its  acknowledged  right  to  deliver  and  receive  payment  for  the 
69S  cattle  the  vendees  accepted,  especially  in  view  of  the  fact  that 
these  cattle  were,  according  to  the  verdict,  worth  several  hundred  dol- 
lars more  than  the  contract  price  which  the  vendees  paid  for  them, 
and  they  could  have  lost  nothing  by  taking  them  If  the  company  had 
received  payment  for  the  282  cattle  that  were  rejected,  there  might 
have  been  some  ground  for  the  claim  of  waiver  here.  Nor  is  it  easy 
to  see  how  the  statement  that  the  vendees  might  come  at  some  future 
day  for  more  cattle,  or  any  action  the  vendor  took  to  gather  and  ship 
them,  could  work  a  waiver,  when  the  cattle  company  notified  the 
vendees,  before  they  started  to  come  for  these  cattle,  that  they  need 
not  do  so,  and  that  it  would  deliver  no  more  cattle  to  them  under  this 
contract.  There  seems  to  be  nothing  in  all  this  that  could  have  in- 
duced the  vendees  to  act  or  omit  to  act  to  their  prejudice.  We  have 
grave  doubts  whether  the  evidence  in  this  case  is  sufficient  to  sustain 
a  verdict  of  a  waiver  of  this  breach  by  the  cattle  company  if  it  were 
rendered. 

But  it  is  unnecessary  to  determine  that  question  here.  That  ques- 
tion, and  the  question  whether  or  not  the  vendees  committed  the 
breach  in  good  faith,  in  the  belief  that  the  rejected  steers  did  not 
comply  with  the  requirements  of  the  contract,  were  submitted  to  the 
jury  under  instructions  to  the  effect  that,  if  they  answered  either  in 
the  affirmative,  the  vendees  could  recover,  although  they  did  commit 
the  first  breach  of  the  contract.  The  verdict  shows  that  the  jury 
found  that  the  vendees  committed  the  first  breach,  and  that  they 
must  have  answered  one  of  these  two  questions  in  the  affirmative.  But 
it  does  not  show  which  one.  Such  a  verdict  cannot  be  upheld  where 
there  is  more  than  one  issue  tried,  and  upon  any  one  of  them  error 
is  committed  in  the  admission  or  rejection  of  evidence,  or  in  the  charge 
of  the  court,  because  it  may  be  that  the  jury  founded  their  verdict 
upon  the  very  issue  to  which  the  erroneous  ruling  related,  and  that 
they  were  controlled  in  their  finding  bv  that  ruling.  Coal  Co.  v.  John- 
son, 6  C.  C.  A.  148,  56  Fed.  810;  State  of  Maryland  v.  Baldwin,  112 
U.  S.  490,  492,  5  Sup.  Ct.  278,  28  L.  Ed..  822. 

There  are  other  questions  discussed  in  the  briefs,  but,  as  the  case 
must  be  retried,  and  these  questions  may  not  arise  upon  a  second 
trial,  it  is  unnecessary  now  to  notice  them.  The  judgment  is  accord- 
ingly reversed,  with  costs,  and  the  cause  remanded,  with  directions 
to  grant  a  new  trial. 


DELIVERY   TO   CARRIER  221 


IV.  Delivery  to  Carrier  4 


WHEELHOUSE  v.  PARR. 
(Supreme  Judicial  Court  of  Massachusetts,  1SS6.    141  Mass.  593,  6  N.  E.  7S7.) 

This  was  an  action  of  contract  to  recover  $440.22  for  a  lot  of  leath- 
er sold  to  defendant.  Hearing  in  the  superior  court,  which  found  for 
the  plaintiff,  and  the  defendant  appealed.  The  facts  appear  in  the 
opinion. 

D  evens,  J.  Where  goods  ordered  and  contracted  for  are  not  de- 
livered directly  to  the  purchaser,  but  were  to  be  sent  to  him  by  the 
vendor,  and  the  vendor  delivers  them  to  the  carrier,  to  be  transported 
in  the  mode  agreed  on  by  the  parties,  or  directed  by  the  purchaser; 
or  where  no  agreement  be  made,  or  directions  given,  to  be  transported 
in  the  usual  mode;  or  where  the  purchaser,  being  informed  of  the 
mode  of  transportation,  assents  to  it;  or  where  there  have  been  pre- 
vious sales  of  other  goods  to  the  transportation  of  which,  in  a  simi- 
lar manner,  the  purchaser  has  not  objected, — the  goods,  when  de- 
livered to  the  carrier,  are  at  the  risk  of  the  purchaser,  and  the  prop- 
erty is  deemed  to  be  vested  in  him,  subject  to  the  vendor's  right  of 
stoppage  in  transitu.  This  proposition  assumes  that  proper  direc- 
tions and  information  are  given  the  carrier  as  to  forwarding  the 
goods.  Whiting  v.  Farrand,  1  Conn.  60;  Ouimby  v.  Carr,  7  Alien, 
417;  Finn  v.  Clark,  10  Allen,  484;  Finn  v.  Clark,  12  Allen,  522; 
Downer  v.  Thompson,  2  Hill  (N.  Y.)  137;  Foster  v.  Rockwell,  104 
Mass.  170;  Odell  v.  Boston  &  M.  R.  R.,  109  Mass.  50;  Wigton  v. 
ley,  130  Mass.  252. 

The  defendant  had  made  a  purchase  of  leather  in  November   pre- 
vious to  the  purchase  of  that  the  price  of  which  is  in  controversy, 
under  a  direction  to  plaintiff  to  "ship  to  care  of  D.  and  C.   Mclver, 
shipping  merchants,   Liverpool,  as  soon  as  possible,  for  their  next 
nner   t<  ton,   direct."     This   shipment   was    made   as   ordered, 

and  on  Di         ber  3,  1884,  the  defendant  sent  a  further  ord  mil;: 

"A-  regards  tin-  shipping  of  the  leather,  just  received,  you  have  done 
rything  satisfactory.     Shi])  this  order  in  like  manner,"-   adding 
some  directions  as  to  marking  the  pai  .  not   here  important. 

The  directions  by  which  the  plaintiff  was  i . »  be  controlled  inn  1 
interpreted  as  requiring  him  to  forward  the  goods  to  Mclver  &  Co., 
to  be  transported  by  them  by  the  Cunard  line,  <<\~  which  they  were 
managers  and  agents.    The  words  "their  next  steamer"  could  not 
have  meant  a  earner  which  would  accept   freight    from   Mclver 

&  Co.     Ca  i  s  may  1m-  readily  imagined  where  these  words  would  he 

«  I  or  d  Iod  <»f  prin<  Iples,  see  Tiffany,  Bales  (2d  Ed  I      B  \,  9L 


222  PERFORMANCE  OF  CONTRACT 

of  the  highest  importance;  as  if  the  defendant  had  an  open  policy  of 
insurance  protecting  his  goods,  which  might  be  sent  by  the  Cunard 
line.  It  might  also  be  true  that  defendant  would  not  deem  a  policy 
of  insurance  necessary  where  goods  were  sent  by  a  well-established 
passenger  line,  where  greater  precautions  might  probably  be  taken 
Eor  safety,  which  he  would  deem  necessary  when  they  were  sent  by  a 
purely  freighting  steamer.  The  goods  were  actually  forwarded  to 
Mclver  &  Co.,  with  instructions  in  conformity  with  the  directions  of 
the  defendant;  and,  had  the  matter  ended  there,  so  far  as  any  direc- 
tion to  Mclver  &  Co.  is  concerned,  the  plaintiff  would  be  entitled  to 
treat  them  as  delivered  to  the  defendant,  and  to  require  him  to  pay 
the  purchase  money.  If,  on  the  other  hand,  while  the  goods  were 
vet  in  the  hands  of  the  carrier,  and  before  transportation  of  them  had 
commenced,  the  plaintiff  changed  the  directions  as  given  to  him  by 
defendant,  or  authorized  the  carrier  to  transport  them  in  a  different 
mode  from  that  directed  by  defendant,  and  loss  has  thereby  occurred, 
he  cannot  claim  that  they  were  delivered  to  defendant  by  him.  By 
continuing  to  exercise  dominion  over  them,  and  by  giving  a  new  di- 
rection, impliedly  withdrawing  the  directions  previously  given,  he 
cannot  be  allowed  to  assert  that  he  had  made  a  complete  delivery  by 
his  original  act,  if  a  loss  has  occurred  by  reason  of  that  which  he  has 
subsequently  done  or  directed.  The  change  in  the  direction  given 
relates  back  to  and  qualifies  the  original  delivery. 

The  plaintiff,  in  answer  to  a  letter  from  Mclver  &  Co.,  after  the 
goods  had  reached  them,  inquiring  whether  they  were  to  keep  the 
goods  "for  our  steamer  on  the  14th,  or  ship  by  the  Glamorgan,"  or- 
dered them  to  be  shipped  by  the  steamer  arriving  out  first,  presum- 
ably the  steamer  which  Mclver  &  Co.  believed  would  be  first  to  ar- 
rive. The  Glamorgan  was  not  a  steamer  of  any  line  of  which  Mclver 
&  Co.  were  owners  or  agents,  and  in  no  way  answers  the  descrip- 
tion of  "their  steamer"  as  applied  to  Mclver  &  Co.  By  neglecting 
to  limit  the  authority  of  Mclver  &  Co.  to  send  by  a  steamer  which 
could  be  thus  described,  and  by  directing  them  to  send  by  the  steam- 
er which  would  first  arrive,  the  plaintiff  had  failed  to  comply  with 
the  orders  of  the  defendant  as  to  the  shipment  of  goods ;  and  if  cor- 
rect directions  had  originally  been  given,  had  withdrawn  them,  and 
substituted  others.  When,  therefore,  exercising  the  authority  thus 
given  by  plaintiff,  Mclver  &  Co.  sent  by  the  Glamorgan,  as  being,  in 
their  judgment,  the  steamer  likely  to  arrive  the  first,  and  a  loss  oc- 
curs, it  should  not  be  borne  by  the  defendant,  whose  directions  have 
not  been  followed.     Judgment  for  defendant. 


DELIVERY   TO    CARRIER  223 


KELSEA  v.  RAMSEY  &  GORE  MFG.  CO. 

(Court  of  Errors  and  Appeals  of  New  Jersey,  1893.     55  N.  J.  Law,  320,  26 

Atl.  907,  22  L.  R.  A.  415.) 

Action  on  a  contract  by  Joseph  U.  Kelsea  against  the  Ramsey  ec 
Gore  Manufacturing  Company.  Plaintiff  had  judgment,  and  de- 
fendant brings  error. 

Van  Svckhl,  J.5  It  appears  in  the  case  that  the  defendants,  who 
live  in  Paterson,  N.  J.,  made  a  valid  contract  in  March,  1890,  with 
the  plaintiff,  who  is  a  bobbin  manufacturer  in  New  Hampshire,  un- 
der which  the  latter  was  to  manufacture  6,000  bobbins  and  send  th 
to  the  defendants  at  Paterson.  The  following  are  the  controlling- 
facts  in  the  case:  The  contract  was  made  in  March,  1890,  and  the 
plaintiff  at  once  commenced  to  make  the  bobbins.  On  the  28th  of 
March,  1890,  the  defendants  wrote  to  one  Wilkius,  who  had  intro- 
duced them  to  the  plaintiff,  requesting  him  to  tell  the  plaintiff  to 
stop  the  order  for  the  time  being.  It  does  not  appear  that  the  con- 
tents of  this  letter  were  communicated  to  the  plaintiff.  On  the  2lHh 
of  March,  1890,  Wilkins  replied  to  the  letter  of  the  defendants,  ask- 
ing them  to  explain  why  they  wished  to  have  the  order  canceled. 
The  case  shows  no  reply  to  this  letter.  On  the  6th  of  June,  1890, 
the  plaintiff  shipped  to  defendants  by  railroad  1,400  bobbins,  and  on 
July  25,  1890,  the  balance  of  the  6,000  were  shipped  in  same  way. 
Both  lots  arrived  safely  in  Paterson,  and  on  the  14th  of  August,  1890, 
the  defendants  wrote  to  the  plaintiff  that  they  would  not  accept  or 
pay  for  them.  This  suit  was  instituted  to  recover  the  price  agreed 
upon  when  the  order  was  given.     *     *     * 

The  third  ground  of  defense  is  that  the  order  to  stop  for  a  til 
terminated  the  plaintiff's  right  to  fill  the  order,  but  to  this  I  cannot 
agree.  His  right,  under  the  contract,  was  to  proceed  at  once  with 
the  manufacture  of  the  goods,  and  to  make  delivery  within  a  reason- 
able time.  The  defendants  had  no  right  to  require  him  to  stop 
temporarily,  and  could  not,  by  such  notice,  change  the  plaintiff's 
rights  under  the  contract. 

The  fourth  ground  relied  upon  by  the  defendants  is  the  debatable 
.  and  thai  is  thai  there  was  no  acceptance  by  the  defendanl  ;,  and 
therefore  that  the  title  did  not  pass  to  defendants,  and  the  price  con- 
sequently cannol  be  sued  for;  thai  the  only  remedy  of  the  plaintiff  Is 
an  action  of  damage  for  nonacceptance.  If  the  question  in  this  i 
was  whether  there  was  delivery  and  acceptance  to  take  the  ease  out 
of  the  statute  of  fraud-,  it  would  be  clear  thai  the  plaintiff  could  nol 
tver,  for  there  wa    a  refusal  to  accept,     In  this  case  the  contract 

conceded  to  be  a  valid  contracl   in  writing,  and  the  question  p 
sented  is  the  narrower  one,  whether  there  was  such  a   delivery  as 

the  title  to  the  venders,  so  that  they  may  he  held   for  the  pur 
Part  <>f  the  opinion  is  omll  ted. 


224  PERFORMANCE    OF    CONTRACT 

chase  price.  The  vendor  claims  that  the  delivery  of  the  goods  to  the 
common  carrier  constituted  a  delivery  to  the  purchasers,  and  passed 
the  title  to  them,  subject  only  to  the  right  of  stoppage  in  transitu. 
It  is  not  asserted  that  the  receipt  by  the  carrier  constitutes  accept- 
ance by  the  vendees ;  it  is  only  a  delivery,  not  an  acceptance.  That 
the  carrier,  in  the  absence  of  authority  to  accept,  represents  the  pur- 
chasers only  to  receive  and  forward. 

Although  the  cases  upon  this  subject  are  not  entirely  in  accord, 
the  authorities  generally  hold  that  a  delivery  to  a  common  carrier 
of  the  goods,  properly  addressed  to  the  vendee,  is  a  delivery  to  the 
vendee,  subject  to  the  vendor's  right  of  stoppage  in  transitu,  and  to 
the  vendee's  right  to  reject  for  nonconformity  to  the  contract. 
Brown  v.  Hodgson,  2  Camp.  37;  Dutton  v.  Solomonson,  3  Bos.  & 
P.  582 ;  Dunlop  v.  Lambert,  6  Clark  &  F.  600 ;  Fragano  v.  Long,  4 
Barn.  &  C.  219;  Dawes  v.  Peck,  8  Term  R.  330;  Krulder  v.  Ellison, 
47  N.  Y.  36,  7  Am.  Rep.  402 ;  Silver  Plate  Co.  v.  Green,  72  N.  Y. 
17;  Spencer  v.  Hale,  30  Vt.  316,  73  Am.  Dec.  309;  Stanton  v.  Eager, 
16  Pick.  467;  Hunter  v.  Wright,  12  Allen,  548;  Hall  v.  Richardson, 
16  Md.  396,  77  Am.  Dec.  303 ;  Magruder  v.  Gage,  33  Md.  344,  3  Am. 
Rep.  177;  1  Benj.  Sales,  §§  161,  181;  Story,  Sales,  §  306;  2  Kent, 
Comm.  499.  The  distinction  is  made  in  some  of  these  cases  that, 
in  order  to  give  to  the  delivery  to  the  carrier  the  effect  of  a  delivery 
to  the  buyer,  the  carrier  must  be  selected  or  named  by  the  buyer. 
When  the  contract  of  the  manufacturer  is  simply  to  make  the  goods 
at  an  agreed  price,  he  has  fully  executed  the  agreement  on  his  part 
when  the  goods  are  produced  at  his  factory,  ready  to  be  delivered 
on  demand.  In  that  case,  however,  he  is  not  authorized  by  the  ven- 
dee to  deliver  them  for  transportation.  But  when  the  purchaser  in- 
structs the  vendor  to  send  the  goods  to  him  it  does  not  appear  how 
it  makes  any  difference  in  the  rule  applicable  to  the  case  whether  he 
names  the  carrier  or  not.  If  the  carrier  is  not  specified,  the  vendor, 
acting  in  this  respect  under  the  order  of  the  purchaser  to  forward 
the  goods,  is  his  agent  in  the  selection  of  the  carrier,  and  in  either 
case  the  carrier  is,  in  contemplation  of  law,  chosen  by  the  purchaser. 

In  this  case  the  purchasers  expressly  instructed  the  plaintiff  to 
send  the  goods  from  New  Hampshire  to  Paterson.  When  the  goods 
passed  out  of  the  possession  of  the  plaintiff  into  the  hands  of  the  car- 
rier, who  must  be  regarded  as  the  agent  of  the  purchasers  to  trans- 
port them,  the  transfer  of  the  title  to  the  purchasers  'became  complete, 
and  all  the  rights  of  ownership  in  them  passed  to  the  purchasers.  If 
the  carrier  had  converted  the  goods  to  his  own  use,  the  defendants 
could  have  maintained  an  action  for  them;  or  if  there  had  been  a 
loss  in  transit  it  would  have  fallen  on  them.  In  my  opinion,  there- 
fore, the  vendor  was  entitled  to  recover  the  contract  price,  and  the 
judgment  below  should  be  affirmed. 


buyer's  eight  to  examine  goods  225 


V.  Buyer's  Right  to  Examine  Goods  6 


MURPHY  v.  SAGOLA  LUMBER  CO. 
(Supreme  Court  of  Wisconsin,  1905.     125  Wis.  363,  103  N.  W.  1113.) 

Action  by  A.  M.  Murphy  and  another  against  the  Sagola  Lumber 
Company.     From  a  judgment  for  plaintiffs,  defendant  appeals. 

This  is  an  action  for  the  breach  of  a  contract  for  the  sale  and  de- 
livery of  a  quantity  of  lumber.  The  plaintiffs  are  box  manufactur- 
ers doing  business  at  Green  Bay,  and  the  defendant  is  a  corporation 
manufacturing  lumber  at  Sagola,  Mich.  On  the  4th  of  September, 
1902,  the  parties  entered  into  the  following  written  contract : 

"Green  Bay,  Wisconsin,  September  4,  1902.  Sagola  Lumber 
Company,  Sagola,  Mich. — Gentlemen :  We  agree  to  pay  to  the  Sa- 
gola Lumber  Company,  $10.00  per  M  for  one  million  feet  of  No. 
4  Boards,  F.  O.  B.  Sagola,  same  grade  and  thickness  as  we  have 
been  getting  in  the  past,  to  be  no  inferior  in  any  way,  and  to  be  ship- 
ped as  ordered  when  in  shipping  condition.  We  to  advance  the 
ola  Lumber  Company,  $5,000.00  to  hold  said  lumber  until  we 
are  ready  to  have  same  forwarded  to  us.  It  is  also  understood  that 
three-quarters  of  this  lumber  is  dry,  or  will  be  at  the  time  it  is 
wanted.  The  above  purchase  is  to  hold  good  with  the  understand- 
ing we  are  able  to  get  a  rate  of  7V2C-  or  stop-over  rate  that  will  not 
exceed  7\^z.     Murphy  Box  Company,  E.  N.  Murphy,  Mgr. 

"We  accept  the  above.  Sagola  Lumber  Company.  John  O'Calla- 
ghan,  President."  7 

Winslow,  J.  The  trial  court  held  that  the  defendant  breached 
the  contract  by  refusing  to  forward  lumber  until  the  plaintiffs  for- 
warded the  last  half  of  the  consideration.  Were  there  no  other  facts 
bearing  upon  the  refusal  to  forward  the  lumber,  we  should  have  no 
difficulty  in  agreeing  with  the  conclusion,  but  there  are  other  undis- 
puted facts  which  seem  to  us  of  paramount  importance,  ami  which 
demonstrate  that  the  plaintiffs  first  breached  the  contract. 

The  contract  v.  nple  and  easily  understood.     It    provided  for 

the  purchase  by  the  plaintiffs  and  the  delivery  by  the  defendant  of 
1,000,000  feel  of  lumber  in  parcels  as  ordered.  The  lumber  was  to 
be  put  "free  on  board"  it  al  Sagola.    This  was  plain- 

\  it  and  delivery  by  the  defendant.     When  tins  was  done,  the 

title  pa  —  1  to  the  plaintiffs,  and  the  lumber  was  at  their  risk-,  it'  it 
corn    ponded  in  quality  with  the  provisions  of  the  contract,  and  t! 
is  no  claim  thai  it  did  not.     The  amounl  of  lumber  t"  he  paid  for 

n  For  6  on  "f  principles,  see  Tiffany,  Salea  (2d  Ed.)  S§  [)2,  93. 

f  Tin-    tatemenl  of  tacts  Is  abi  Id  i  i. 

Cooj  i  v  Cv-i     S.\i  i       -15 


226  PERFORMANCE  OF  CONTRACT 

was  necessarily  the  amount  put  upon  the  cars  at  Sagola  (provided  it 
conformed  with  the  contract),  not  the  amount  taken  off  the  cars  at 
Green  Bay.  Hence,  under  the  terms  and  necessary  implications  of 
the  contract,  while  the  plaintiffs  might  tally  the  lumber  at  Green  Bay 
on  its  arrival,  and  this  tally  would  be  some  proof  of  the  amount 
loaded  on  the  cars  at  Sagola,  they  had  no  right  to  say  that  they 
would  only  pay  for  the  amount  received  at  Green  Bay.  If  such  was 
the  definite  position  taken  by  them  during  the  progress  of  shipments, 
it  was  a  breach  of  the  contract,  for  the  contract  was  to  pay  for  the 
amount  put  onto  the  cars  at  Sagola. 

We  think  that  the  evidence  very  clearly  shows  that  such  was  their 
position  and  claim.  When  the  shipment  of  November  18th  was  re- 
ceived, they  at  once  sent  back  a  statement  showing  that  it  was  480 
feet  short,  and  deducting  the  shortage  from  the  defendant's  credit. 
The  defendant  wrote,  requesting  the  plaintiffs  to  send  a  man  to  Sagola 
to  tally  out  a  lot  with  defendant's  man,  if  there  could  be  no  agree- 
ment on  the  tally.  To  this  letter  plaintiffs  made  no  reply,  but  on 
January  23d,  following,  sent  to  defendant  a  voucher  for  the  amount 
then  shipped  in  excess  of  the  first  half  million  feet,  deducting  the 
alleged  shortage,  and  required  a  receipt  in  full  of  the  account  before 
it  would  be  paid.  This  seems  a  very  clear  indication  that  the  plain- 
tiffs claimed  that  delivery  was  to  be  made  at  Green  Bay,  and  that 
they  would  only  pay  for  the  amount  actually  received  at  that  point. 

That  this  was  their  position  is  further  evidenced  by  plaintiffs'  letter 
of  January  20th,  in  which  they  say  they  will  pay  as  cars  are  received 
and  unloaded ;  also  by  the  testimony  of  one  of  the  plaintiffs,  who  said, 
"We  refused  to  pay  for  any  of  the  lumber  until  it  was  received  by 
us  in  Green  Bay."  Of  course,  the  plaintiffs  had  a  right  to  inspect 
the  lumber  received  at  Green  Bay,  and  reject  the  same  if  not  in  ac- 
cordance with  the  contract.  They  also  had  the  right  to  tally  it,  and 
such  tally  would  be  some  evidence  as  to  the  amount  actually  delivered 
by  loading  on  the  cars  at  Sagola.  But  they  had  no  right  to  insist 
that  they  would  only  pay  for  the  amount  received  at  Green  Bay,  re- 
gardless of  the  amount  loaded  on  cars  at  Sagola.  This  latter  posi- 
tion was  clearly  the  position  which  they  took.  When  this  position 
was  definitely  taken  by  the  plaintiffs,  late  in  January,  1903,  shipments 
were  suspended  for  a  time ;  but  it  is  evident  that  the  plaintiffs  did  not 
regard  it  as  a  final  suspension,  for  on  the  18th  of  February  they  re- 
quested the  defendant  to  ship  the  balance  of  the  lumber. 

In  reply  to  this  the  defendant  again  suggested  that,  if  there  were 
to  be  differences  in  the  tally,  it  would  be  better  to  have  the  tally  cor- 
rected at  Sagola.  The  plaintiffs  rejected  this  suggestion  as  unneces- 
sary, and  the  defendant  on  February  21,  1903,  declined  to  ship  unless 
plaintiffs  agreed  definitely  to  accept  inspection  and  tally  at  Sagola  as 
final,  or  advance  $5,000,  when  they  would  proceed  to  ship  all.  The 
defendant  had  already  submitted  to  the  slight  cut  which  plaintiffs 
made  on  the  November  shipment,  by  accepting  the  money  sent  in 


ACCEPTANCE  I'll 

January  in  full,  but  we  do  not  regard  this  act  as  foreclosing  it  from 
insisting  on  the  proper  construction  of  the  contract  as  to  future  ship- 
ments. The  ground  had  been  taken  by  plaintiffs  that  the  lumber 
was  to  be  delivered  at  Green  Bay,  and  that  only  the  lumber  so  de- 
livered was  to  be  paid  for ;  and  the  defendant,  by  the  letters  last 
quoted,  substantially  took  the  ground,  which  we  believe  to  be  the 
proper  one,  that  under  the  terms  of  the  contract  the  lumber  was  de- 
livered when  loaded  on  cars  at  Sagola,  and  must  be  paid  for  if  of  the 
quality  required. 

Viewed  in  the  light  of  all  the  circumstances,  the  plaintiffs'  letters 
can  only  be  construed  as  a  demand  that  the  lumber  be  delivered  at 
Green  Bay,  and  that  only  lumber  so  delivered  would  be  paid  for, 
when  the  contract  provided  for  its  delivery  at  Sagola.  This  was  an 
announcement  that  they  declined  to  carry  out  the  contract  according 
to  its  terms,  and  the  defendant  thereupon  had  the  right  to  refuse  to 
further  execute  the  contract  on  its  part.  Nor  were  the  rights  of  the 
parties  affected  by  the  offer  of  the  defendant  to  deliver  at  Green  Bay 
on  condition  that  advance  payment  be  made  for  the  balance  of  the 
lumber.  This  amounted  simply  to  an  offer  to  vary  the  terms  of  the 
contract,  which  was  not  accepted  by  the  plaintiffs.  The  conclusion 
reached  upon  this  question  renders  unnecessary  any  consideration  of 
the  custom  found  by  the  jury,  or  of  any  of  the  other  questions  dis- 
cussed by  counsel. 

The  defendants  were  entitled  to  judgment  upon  the  evidence  and 
the  verdict,  and,  the  proper  motion  for  judgment  having  been  made 
in  the  trial  court,  there  is  no  necessity  for  further  trial.  Judgment 
reversed  and  action  remanded,  with  directions  to  enter  judgment  for 
the  defendant  dismissing  the  complaint. 


VI.  Acceptance  8 


BAGBY  v.  WALKER. 
(Curt  of  Appeals  of  Maryland,  L893.    78  Md.  239,  27  Atl.  1033.) 
See    ante,  p.  44,  for  a  report  of  the  case. 

-  For  di  cu    '"ii  of  principles,  see  Tiffany,  Bales  (2d  Ed.)  5  !»t. 


228  PERFORMANCE  OF  CONTRACT 

VII.  Excuses  for  Nonperformance  of  Conditions  • 
1.  Renunciation  of  Contract 


ROEHM  v.  HORST. 

(Supreme  Court  of  the  United  States,  1900.     178  U.  S.  1,  20  Sup.  Ct.  780,  44 

L.  Ed.  953.) 

This  was  an  action  for  breach  of  four  certain  contracts,  brought  by 
Paul  R.  G.  Horst  and  others  against  John  Roehm  in  the  circuit  court 
of  the  United  States  for  the  eastern  district  of  Pennsylvania,  in  Janu- 
ary, 1897,  and  was  tried  under  a  stipulation,  waiving  a  jury,  before 
Dallas,  circuit  judge,  who  made  a  special  finding  of  facts,  and,  on  the 
facts  so  found,  gave  judgment  for  plaintiffs.  84  Fed.  Rep.  565.  The 
case  was  carried  by  defendant  to  the  circuit  court  of  appeals  for  the 
third  circuit,  and  the  judgment  of  the  circuit  court  was  affirmed.  62 
U.  S.  App.  520,  91  Fed.  Rep.  345,  33  C.  C.  A.  550.  Thereupon  Roehm 
applied  to  this  court  for  a  writ  of  certiorari,  which  was  granted,  and 
the  cause  subsequently  heard  here. 

The  opinion  of  the  circuit  court  of  appeals  stated  the  case  thus : 

"In  August,  1893,  Paul  R.  G.  Horst,  E.  Clemens  Horst,  and  Louis  A. 
Horst,  trading  as  Horst  Brothers,  entered  into  a  contract  with  John 
Roehm,  the  defendant  below,  for  the  sale  of  1,000  bales  of  prime  Pa- 
cific coast  hops,  to  be  delivered  at  various  dates  in  the  future,  at  an 
uniform  price  of  22  cents  per  pound.  Of  the  whole  quantity  600  bales 
had  been  delivered,  accepted,  and  paid  for  at  the  contract  price,  so  that 
in  July,  1896,  there  remained  undelivered  400  bales.  These  were  de- 
liverable at  the  rate  of  20  bales  per  month  during  each  month  from 
October,  1896,  to  July,  1898,  both  inclusive,  excepting,  however,  from 
said  period  the  months  of  August  and  September,  1897,  when  no  de- 
liveries were  called  for.  The  record  shows  that  this  contract  was  the 
result  of  one  negotiation,  and  provided  for  a  supply  of  hops  for  five 
years.  Ten  separate  papers  were  drawn,  each  covering  a  period  of  five 
months  or  one  season.  They  all  bear  the  same  date  and  are  similar  as 
regards  the  quantity  of  hops  to  be  delivered  and  the  price  to  be  paid. 
They  differ  only  in  the  time  of  delivery  and  the  year's  crop  from  which 
delivery  was  to  be  made. 

"In  June,  1896,  the  firm  of  Horst  Brothers  was  dissolved  by  the  re- 
tirement of  Paul  R.  G.  Horst.  He  assigned  his  interest  in  the  Roehm 
contract  to  the  remaining  partners,  who  continued  the  business  under 
the  same  firm  name.  Roehm,  the  defendant  below,  was  notified  of 
this  dissolution  of  the  firm  and  of  the  transfer  of  Paul  R.  G.  Horst's 

e  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  97-99. 


EXCUSES   FOE    NONPERFORMANCE   OF   CONDITIONS  229 

interest  in  the  contract  to  its  successors.  He  thereupon  gave  notice  to 
the  firm  that  he  considered  his  contract  canceled  thereby.  Subsequent- 
ly the  firm  of  Horst  Brothers  advised  the  defendant  of  their  ability  and 
willingness  to  perform  the  contract,  and  under  date  of  September  4, 
1896,  wrote  Roehm,  as  follows : 

"  'Dear  Sir:  Will  you  please  write  us  whether  you  wish  us  to  ship 
the  hops  under  your  contract  direct  to  your  city  ?  The  contract  calls 
for  delivery  m  Xew  York,  and  as  we  ship  direct  from  this  coast  we  can 
ship  to  either  city  at  same  rate.  Consequently  there  will  be  a  saving 
to  you  of  freight  if  we  ship  to  your  city  direct  from  here.  Awaiting 
your  reply,  we  are, 

"  'Very  truly.  Horst  Brothers.' 

"To  this  letter  Roehm  replied,  under  date  of  September  14,  1896: 
"  'Dear  Sirs :   In  response  to  your  letters  dated  3d  and  4th  inst.,  state 
that  before  shipping  me  any  hops  always  send  me  samples  from  which 
I  can  select  lots,  the  same  as  you  have  been  doing  in  the  past. 

"  'Very  truly,  John  Roehm.' 

"On  October  9,  1896,  Horst  Brothers  advised  Roehm  of  the  ship- 
ment of  20  bales  of  hops  for  the  October  delivery,  as  called  for  by  the 
contract,  which  Roehm,  by  telegraph,  refused  to  receive,  and  as  supple- 
mentary thereto  sent  the  following  letter,  dated  October  24,  1896: 

"  'Gentlemen :  Yours  of  October  9,  inclosing  bill  of  lading  and  bill 
of  particulars  per  20  bales  of  hops  forwarded  me  under  the  terms  of 
contract  of  August  25,  1893,  was  received,  and  I  have  wired  you  that 
I  decline  to  receive  the  same.  I  notified  you  under  date  of  June  27, 
1896,  that,  owing  to  the  dissolution  of  the  copartnership  with  which  I 
originally  contracted  and  the  fact  that  this  firm  was  no  longer  in  exist- 
ence, I  considered  my  contract  at  an  end,  and  will  make  arrangements 
for  purchasing  my  supplies  elsewhere.  I  am  advised  that  I  am  under 
no  obligations  by  that  contract  to  accept  supplies  from  you.  If  you 
desire  to  bill  these  goods  at  the  current  market  rate  under  a  new  con- 
tract, I  will  accept  them  if  upon  inspection  they  are  of  the  quality  de- 
sired; otherwise  they  will  remain  at  the  freight  station  subject  to  your 
order. 

" 'Very  truly  yours,  John  Roehm.' 

"No  further  efforts  were  made  by  Horst  Brothers  to  make  delivery 
under  the  contract,  but  ill  January,  1897,  this  action  was  begun  by  all 
the  original  parties  thereto,  to  the  use  of  the  linn  as  at  present  con- 
stituted, to  recover  damages  for  its  breach.    Judgmenl  was  rendered  in 

>r  of    the  plaintiffs." 

Mr.  Chief  Justice   Fuller  delivered  the  opinion  of  the  court:10 

It  is  conceded  that  the  contri  I  oul  in  the  finding  of  facts  were 

four  of  ten  simultaneous  contracts,  for  100  hales  each,  covering  the 

furnishings  of  l.'KK)  bales  of  hops  during  a  period  of  five  years,  of 

ip  The  statement  of  facta  la  rewritten  and  pari  of  the  opinion  is  omitted 


230  PERFORMANCE  OF  CONTRACT 

which  600  bales  had  been  delivered  and  paid  for.  If  the  transaction 
could  be  treated  as  amounting  to  a  single  contract  for  1,000  bales,  the 
breach  alleged  would  have  occurred  while  the  contract  was  in  the 
course  of  performance ;  but  plaintiffs'  declaration  or  statement  of  de- 
maud  averred  the  execution  of  the  four  contracts,  "two  for  the  pur- 
chase and  sale  of  Pacific  coast  hops  of  the  crop  of  1896,  and  two  for 
the  purchase  and  sale  of  Pacific  coast  hops  of  the  crop  of  1897,"  set 
them  out  in  extenso,  and  claimed  recovery  for  breach  thereof,  and  in 
this  view  of  the  case,  while  as  to  the  first  of  the  four  contracts,  the 
time  to  commence  performance  had  arrived,  and  the  October  shipment 
had  been  tendered  and  refused,  the  breach  as  to  the  other  three  con- 
tracts was  the  refusal  to  perform  before  the  time  for  performance  had 
arrived. 

The  first  contract  falls  within  the  rule  that  a  contract  may  be  broken 
by  the  renunciation  of  liability  under  it  in  the  course  of  performance 
and  suit  may  be  immediately  instituted.  But  the  other  three  contracts 
involve  the  question  whether,  where  the  contract  is  renounced  before 
performance  is  due,  and  the  renunciation  goes  to  the  whole  contract, 
and  is  absolute  and  unequivocal,  the  injured  party  may  treat  the  breach 
as  complete  and  bring  his  action  at  once.  Defendant  repudiated  all  lia- 
bility for  hops  of  the  crop  of  1896  and  of  the  crop  of  1897,  and  noti- 
fied plaintiffs  that  he  should  make  (according  to  a  letter  of  his  attor- 
ney in  the  record  that  he  had  made)  arrangements  to  purchase  his 
stock  of  other  parties,  whereupon  plaintiffs  brought  suit.  The  question 
is  therefore  presented,  in  respect  of  the  three  contracts,  whether  plain- 
tiffs were  entitled  to  sue  at  once  or  were  obliged  to  wait  until  the  time 
came  for  the  first  month's  delivery  under  each  of  them. 

It  is  not  disputed  that  if  one  party  to  a  contract  has  destroyed  the 
subject-matter,  or  disabled  himself  so  as  to  make  performance  impos- 
sible, his  conduct  is  equivalent  to  a  breach  of  the  contract,  although 
the  time  for  performance  has  not  arrived ;  and  also  that  if  a  contract 
provides  for  a  series  of  acts,  and  actual  default  is  made  in  the  perform- 
ance of  one  of  them,  accompanied  by  a  refusal  to  perform  the  rest,  the 
other  party  need  not  perform,  but  may  treat  the  refusal  as  a  breach 
of  the  entire  contract,  and  recover  accordingly. 

And  the  doctrine  that  there  may  be  an  anticipatory  breach  of  an  ex- 
ecutory contract  by  an  absolute  refusal  to  perform  it  has  become  the 
settled  law  of  England  as  applied  to  contracts  for  services,  for  mar- 
riage, and  for  the  manufacture  or  sale  of  goods.  The  cases  are  ex- 
tensively commented  on  in  the  notes  to  Cutter  v.  Powell,  2  Smith, 
Lead.  Cas.  1212,  1220,  9th  edition  by  Richard  Henn  Collins  and  Ar- 
buthnot.  Some  of  these,  though  quite  familiar,  may  well  be  refer- 
red to. 

In  Hochster  v.  De  la  Tour,  2  El.  &  Bl.  678,  plaintiff,  in  April,  1852, 
had  agreed  to  serve  defendant,  and  defendant  had  undertaken  to  em- 
ploy plaintiff,  as  courier,  for  three  months  from  June  1st,  on  certain 


EXCUSES  FOR   NONPERFORMANCE   OF   CONDITIONS  -:>>L 

terms.  On  the  11th  of  May,  defendant  wrote  plaintiff  that  he  had 
changed  his  mind,  and  declined  to  avail  himself  of  plaintiff's  servi 
Thereupon,  and  on  May  22d  plaintiff  brought  an  action  at  law  for 
breach  of  contract  in  that  defendant,  before  the  said  1st  of  June, 
though  plaintiff  was  always  ready  and  willing  to  perform,  refused  to 
engage  plaintiff  or  perform  his  promise,  and  then  wrongfully  exon- 
erated plaintiff  from  the  performance  of  the  agreement,  to  his  dam- 
age. And  it  was  ruled  that  as  there  could  be  a  breach  of  contract  be- 
fore the  time  fixed  for  performance,  a  positive  and  absolute  refusal 
to  carry  out  the  contract  prior  to  the  date  of  actual  default  amounted  to 
such  a  breach. 

In  the  course  of  the  argument,  Mr.  Justice  Crompton  observed : 
"When  a  party  announces  his  intention  not  to  fulfil  the  contract,  the 
other  side  may  take  him  at  his  word  and  rescind  the  contract.  That 
word  'rescind'  implies  that  both  parties  have  agreed  that  the  contract 
shall  be  at  an  end,  as  if  it  had  never  been.  But  I  am  inclined  to  think 
that  the  party  may  also  say:  'Since  you  have  announced  that  you  will 
not  go  on  with  the  contract,  I  will  consent  that  it  shall  be  at  an  end 
from  this  time ;  but  I  will  hold  you  liable  for  the  damage  I  have  sus- 
tained;  and  I  will  proceed  to  make  that  damage  as  little  as  possible 
by  making  the  best  use  I  can  of  my  liberty."  " 

In  delivering  the  opinion  of  the  court  (Campbell,  C.  J.,  Coleridge, 
Erie,  and  Crompton,  JJ.),  Lord  Campbell,  after  pointing  out  that  at 
common  law  there  were  numerous  cases  in  which  an  anticipatory  act, 
such  as  an  act  rendering  the  contract  impossible  of  performance,  or 
disabling  the  party  from  performing  it,  would  constitute  a  breach  giv- 
ing an  immediate  right  of  action,  laid  it  down  that  a  positive  and  un- 
qualified refusal  by  one  party  to  carry  out  the  contract  should  be 
treated  as  belonging  to  the  same  category  as  such  anticipatory  acts,  and 
said  : 

"But  it  is  surely  much  more  rational,  and  more  for  the  benefit  of 
i  parties,  that,  after  the  renunciation  of  the  agreement  by  the  de- 
lant,  the  plaintiff  should  be  at  liberty  to  consider  himself  absolved 
'i  any  future  performance  of  it,  retaining  his  right  to  sue  for  any 
damage  he  i  ffered  from  the  breach  of  it     Tims,  instead  of  remain- 

idle  and  laying  out  money  in  preparations  which  must  be 
lie  is  at  liberty  to  seek  service  under  another  employer,  which  would  go 
in  mitigation  of  the  damag  vhich  he  would  otherwise  be  entitled 

for  a  breach  of  the  contract     I  that  the  defendant,  after 

»ntract  and  absolutely  declaring  that  he  will  never  act 
under  it.  should  i  litted  to  object  that  faith  is  given  to  hi 

tion,  and  thai  an  opportunil  ol  Left  to  him  of  changing  his  mind. 

If  tl  irred  of  any  remedy  by  entering  into  an  i 

i  inconsistent  with  starting  as  a  i  with  the  defendant  on  the 

It  Jui  e,  he  is  prejudiced  by  putting  faith  in  thi  ertion; 

and  it  would  be  moi  onant  with  principle  if  the  defendant  were 


i;i-  performance  of  contract 

precluded  from  saying  that  he  had  not  broken  the  contract  when  he  de- 
clared that  he  entirely  renounced  it.  Suppose  that  the  defendant,  at 
the  time  of  his  renunciation,  had  embarked  on  a  voyage  for  Australia, 
so  as  to  render  it  physically  impossible  for  him  to  employ  the  plaintiff 
as  a  courier  on  the  continent  of  Europe  in  the  months  of  June,  July, 
and  August,  1852;  according  to  decided  cases,  the  action  might  have 
been  brought  before  the  1st  June;  but  the  renunciation  may  have  been 
founded  on  other  facts,  to  be  given  in  evidence,  which  would  equally 
have  rendered  the  defendant's  performance  of  the  contract  impossible. 
The  man  who  wrongfully  renounces  a  contract  into  which  he  has  delib- 
erately entered  cannot  justly  complain  if  he  is  immediately  sued  for 
a  compensation  in  damages  by  the  man  whom  he  has  injured;  and  it 
seems  reasonable  to  allow  an  option  to  the  injured  party,  either  to  sue 
immediately,  or  to  wait  till  the  time  when  the  act  was  to  be  done,  still 
holding  it  as  prospectively  binding  for  the  exercise  of  this  option,  which 
may  be  advantageous  to  the  innocent  party,  and  cannot  be  prejudicial 
to  the  wrongdoer.  An  argument  against  the  action  before  the  1st  June 
is  urged  from  the  difficulty  of  calculating  the  damages ;  but  this  ar- 
gument is  equally  strong  against  an  action  before  the  1st  of  Septem- 
ber, when  the  three  months  would  expire.  In  either  case,  the  jury  in 
assessing  the  damages  would  be  justified  in  looking  to  all  that  had 
happened,  or  was  likely  to  happen,  to  increase  or  mitigate  the  loss  of 
the  plaintiff  down  to  the  day  of  trial.  We  do  not  find  any  decision 
contrary  to  the  view  we  are  taking  of  this  case."     *     *     * 

In  Johnstone  v.  Milling,  L.  R.  16  Q.  B.  Div.  467,  Lord  Esher,  Mas- 
ter of  the  Rolls,  puts  the  principle  thus :  "When  one  party  assumes  to 
renounce  the  contract,  that  is,  by  anticipation  refuses  to  perform  it, 
he  thereby,  so  far  as  he  is  concerned,  declares  his  intention  then  and 
there  to  rescind  the  contract.  Such  a  renunciation  does  not,  of  course, 
amount  to  a  rescission  of  the  contract,  because  one  party  to  a  contract 
cannot  by  himself  rescind  it,  but  by  wrongfully  making  such  a  renunci- 
ation of  the  contract  he  entitles  the  other  party,  if  he  pleases,  to  agree 
to  the  contract  being  put  an  end  to,  subject  to  the  retention  by  him  of 
his  right  to  bring  an  action  in  respect  of  such  wrongful  rescission. 
The  other  party  may  adopt  such  renunciation  of  the  contract  by  so  act- 
ing upon  it  as  in  effect  to  declare  that  he  too  treats  the  contract  as  at 
an  end,  except  for  the  purpose  of  bringing  an  action  upon  it  for  the 
damages  sustained  by  him  in  consequence  of  such  renunciation." 

Lord  Justice  Bowen  said  (p.  472) :  "We  have,  therefore,  to  consider 
upon  what  principles  and  under  what  circumstances  it  must  be  held 
that  a  promisee,  who  finds  himself  confronted  with  a  declaration  of  in- 
tention by  the  promisor  not  to  carry  out  the  contract  when  the  time 
for  performance  arrives,  may  treat  the  contract  as  broken,  and  sue  for 
the  breach  thereof.  It  would  seem  on  principle  that  the  declaration  of 
such  intention  by  the  promisor  is  not  in  itself  and  unless  acted  on  by 
the  promisee  a  breach  of  the  contract;    and  that  it  only  becomes  a 


EXCUSES   FOE   NONPERFORMANCE    OF   CONDITIONS  233 

breach  when  it  is  converted  by  force  of  what  follows  it  into  a  wrongf  .1 
renunciation  of  the  contract.  Its  real  operation  appears  to  be  to  give 
the  promisee  the  right  of  electing  either  to  treat  the  declaration  as 
brutum  fulmen,  and,  holding  fast  to  the  contract,  to  wait  till  the  time 
for  its  performance  has  arrived,  or  to  act  upon  it  and  treat  it  as  a  final 
assertion  by  the  promisor  that  he  is  no  longer  bound  by  the  contract, 
and  a  wrongful  renunciation  of  the  contractual  relation  into  which  he 
has  entered.  But  such  declaration  only  becomes  a  wrongful  act  if  the 
promisee  elects  to  treat  it  as  such.  If  he  does  so  elect,  it  becomes  a 
breach  of  contract,  and  he  can  recover  upon  it  as  such." 

The  doctrine  which  thus  obtains  in  England  has  been  almost  univer- 
sally accepted  by  the  courts  of  this  country,  although  the  precise  point 
has  not  been  ruled  by  this  court. 

In  Smoot's  Case,  15  Wall.  36,  48,  sub  nom.  United  States  v.  Smoot, 
21  L.  Ed.  107,  110,  Mr.  Justice  Miller  observed:  "In  the  case  of  Phill- 
potts  v.  Evans,  5  Mees.  &  W.  475,  the  defendant,  who  had  agreed  to 
receive  and  pay  for  wheat,  notified  the  plaintiff,  before  the  time,  of  de- 
livery, that  he  would  not  receive  it.  The  plaintiff  tendered  the  wheat 
at  the  proper  time,  and  the  only  question  raised  was,  whether  the  meas- 
ure of  damages  should  be  governed  by  the  price  of  the  wheat  at  the 
time  of  the  notice  or  at  the  time  of  the  tender.  Baron  Parke  said : 
T  think  no  action  would  have  lain  for  the  breach  of  the  contract  at 
the  time  of  the  notice,  but  that  plaintiff  was  bound  to  wait  until  the 
time  of  delivery  to  see  whether  the  defendant  would  then  receive  it. 
The  defendant  might  have  chosen  to  take  it  and  would  have  been  guilty 
of  no  breach  of  contract.  His  contract  was  not  broken  by  his  previous 
declaration  that  he  would  not  accept.'  And  though  some  of  the  judges 
in  the  subsequent  case  of  Hochster  v.  De  la  Tour,  2  El.  &  Bl.  678,  dis- 
approve very  properly  of  the  extreme  ground  taken  by  Baron  Parke, 
they  all  agree  that  the  refusal  to  accept,  on  the  part  of  the  defendant, 
in  such  case,  must  be  absolute  and  unequivocal,  and  must  have  been 
acted  on  by  the  plaintiff."     *     *     * 

In  Dingley  v.  Oler,  117  U.  S.  490,  29  L.  Ed.  9S4,  6  Sup.  Ct.  850, 
it  was  held  that  the  case  did  not  come  within  the  rnle  laid  down  in 
Hochster  v.  De  la  Tour,  but  within  Avery  v.  Bowdcn  and  Johnstone  \. 
Milling,  since,  in  the  view  entertained  by  the  court,  there  was  not  a 
renunciation  of  the  contract  by  a  total  refusal  to  perform. 

So  in  Cleveland  Rolling  Mill  v.  Rhodes,  l-'l  U.  S.  255,  264,  30  L. 
Ed.  920,  923,  7  Sup.  Ct  involving  a  contract  for  the  delivery  of 

iron  ore,  the  court  said:  "The  nec<  ary  conclusion  is  that  the  defend- 
ant was  justified  in  refusing  to  accept  any  of  the  iron  shipped  in  1881  : 

and  whether  the  notice  previously  given  by  the  defendanl  to  the  plain 

tiff,  that  it  would  not  accept  under  the  contract  any  iron  made  after 
December  31,  1  lit  have  been  treated  by  the  plaintiffs  as  a  re- 

nunciation and  a  breach  of  the  contract,  need  not  he  considered,  bi 
cause  the  plaintiffs  did  not  act  iq  on  it  as  Mich." 


234  PERFORMANCE  OP  CONTRACT 

In  Anvil  Min.  Co.  v.  Humble,  153  U.  S.  540,  38  L.  Ed.  814,  14 
Sup.  Ct.  876,  performance  had  been  commenced,  but  completion  was 
prevented  by  defendant,  and  Mr.  Justice  Brewer,  speaking  for  the 
court,  said :  ''Whenever  one  party  thereto  is  guilty  of  such  a  breach 
as  is  here  attributed  to  the  defendant  the  other  party  is  at  liberty  to 
treat  the  contract  as  broken  and  desist  from  any  further  effort  on  his 
part  to  perform;  in  other  words,  he  may  abandon  it,  and  recover  as 
damages  the  profits  which  he  would  have  received  through  full  per- 
formance. Such  an  abandonment  is  not  technically  a  rescission  of  the 
contract,  but  is  merely  an  acceptance  of  the  situation  which  the  wrong- 
doing of  the  other  party  has  brought  about."     *     *     :;: 

In  Hancock  v.  New  York  L.  Ins.  Co.  Fed.  Cas.  No.  6,011,  Hochster 
v.  De  la  Tour  was  followed  by  Bond,  J.,  in  the  circuit  court  for  the 
eastern  district  of  Virginia;  and  in  Grau  v.  McVicker,  8  Biss.  13, 
Fed.  Cas.  No.  5,708,  Drummond,  J.,  fully  approved  of  the  principles 
decided  in  that  case,  and  remarked:  "It  seems  to  me  that  it  is  the 
better  rule  to  hold  that  the  party  who  has  refused  to  perform  his  con- 
tract is  liable  at  once  to  an  action,  and  that  whatever  arises  afterwards, 
or  may  arise  in  consequence  of  the  time  not  having  come  or  not  having 
expired,  should  be  considered  in  estimating  the  damages."     *     *     * 

The  great  weight  of  authority  in  the  state  courts  is  to  the  same 
effect.     *     *     * 

The  rule  is  disapproved  in  Daniels  v.  Newton,  114  Mass.  530,  19 
Am.  Rep.  384,  and  in  Stanford  v.  McGill,  6  N.  D.  536,  38  L.  R.  A. 
760,  72  N.  W.  938,  on  elaborate  consideration.  The  opinion  of  Judge 
Wells  in  Daniels  v.  Newton  is  generally  regarded  as  containing  all  that 
could  be  said  in  opposition  to  the  decision  of  Hochster  v.  De  la  Tour, 
and  one  of  the  propositions  on  which  the  opinion  rests  is  that  the  adop- 
tion of  the  rule  in  the  instance  of  ordinary  contracts  would  necessitate 
its  adoption  in  the  case  of  commercial  paper.  But  we  are  unable  to  as- 
sent to  that  view.  In  the  case  of  an  ordinary  money  contract,  such  as 
a  promissory  note,  or  a  bond,  the  consideration  has  passed ;  there  are 
no  mutual  obligations;  and  cases  of  that  sort  do  not  fall  within  the 
reason  of  the  rule. 

In  Nichols  v.  Scranton  Steel  Co.,  137  N.  Y.  487,  33  N.  E.  566,  Mr. 
Justice  Peckham,  then  a  member  of  the  court  of  appeals  of  New  York, 
thus  expresses  the  distinction :  "It  is  not  intimated  that  in  the  bald  case 
of  a  party  bound  to  pay  a  promissory  note  which  rests  in  the  hands  of 
the  payee,  but  which  is  not  yet  due,  such  note  can  be  made  due  by  any 
notice  of  the  maker  that  he  does  not  intend  to  pay  it  when  it  matures. 
We  decide  simply  this  case  where  there  are  material  provisions  and 
obligations  interdependent.  In  such  case,  and  where  one  party  is 
bound,  from  time  to  time,  as  expressed,  to  deliver  part  of  an  aggregate 
and  specified  amount  of  property  to  another,  who  is  to  pay  for  each 
parcel  delivered  at  a  certain  time  and  in  a  certain  way,  a  refusal  to  be 
further  bound  by  the  terms  of  the  contract  or  to  accept  further  de- 


EXCUSES   FOE   NONPERFORMANCE    OF   CONDITIONS  235 

liveries,  and  a  refusal  to  give  the  notes  already  demandable  for  a  por- 
tion of  the  property  that  has  been  delivered,  and  a  refusal  to  give  any 
more  notes  at  any  time  or  for  any  purpose  in  the  future,  or  to  pay 
moneys  at  any  time,  which  are  eventually  to  be  paid  under  the  contract, 
all  this  constitutes  a  breach  of  the  contract  as  a  whole,  and  gives  a  pres- 
ent right  of  action  against  the  party  so  refusing  to  recover  dam:. 
which  the  other  may  sustain  by  reason  of  this  refusal." 

We  think  it  obvious  that  both  as  to  renunciation  after  commencement 
of  performance  and  renunciation  before  the  time  for  performance  has 
arrived,  money  contracts,  pure  and  simple,  stand  on  a  different  footing 
from  executory  contracts  for  the  purchase  and  sale  of  goods. 

The  other  proposition  on  which  the  case  of  Daniels  v.  Newton  was 
rested  is  that  until  the  time  for  performance  arrives  neither  contracting 
party  can  suffer  any  injury  which  can  form  a  ground  of  damages. 
Wells,  J.,  said:  "An  executory  contract  ordinarily  confers  no  title  or 
interest  in  the  subject-matter  of  the  agreement.  Until  the  time  arrives 
when  by  the  terms  of  the  agreement  he  is  or  might  be  entitled  to  its 
performance,  he  can  suffer  no  injury  or  deprivation  which  can  form 
a  ground  of  damages.  There  is  neither  violation  of  right,  nor  loss 
upon  which  to  found  an  action." 

But  there  are  many  cases  in  which,  before  the  time  fixed  for  per- 
formance, one  of  the  contracting  parties  may  do  that  which  amounts 
to  a  breach  and  furnishes  a  ground  of  damages.  It  has  always  been 
the  law  that  where  a  party  deliberately  incapacitates  himself  or  ren. 
performance  of  his  contract  impossible,  his  act  amounts  to  an  injur 
the  other  party,  which  gives  the  other  party  a  cause  of  action  for 
breach  of  contract ;  yet  this  would  seem  to  be  inconsistent  with  the 
reasoning  in  Daniels  v.  Newton,  though  it  is  not  there  in  terms  decided 
"that  an  absolute  refusal  to  perform  a  contract,  after  the  time  and  un- 
der the  conditions  in  which  plaintiff  is  entitled  to  require  performance, 
is  not  a  breach  of  the  contract,  even  although  the  contract  is  by  its 
terms  to  continue  in  the  future."     Parker  v.  Russell,  133  Mass.  74. 

in  truth,  the  opinion  goes  upon  a  distinction  between  cases  of  re- 
nunciation before  the  arrival  of  the  time  of   performance  and   tl 
of  renunciation  of  unmatured  obligations  of  a  contract  while  it  is   in 
course  of  performance,  and  it  is  said  that  before  the  argument  on  the 
ground  venience  and  mutual  advantage  to  the  parties  can  pi 

erly  have  weight,  "the  point  b  eached  mu  :  be  shown  t< 

nt  with  logical  deductions  from  the  strictly  legal  aspects  of  the 

hink  that  there  can  be  no  controlling  distinction  on  this  point 
am  the  two  classes  ol  d  thai  it  is  proper  to  consider 

I  hat  the  absolute  n  nunciatii  m  of  ] 
lar  contrai  stitutes  such  a  breach  a-  to  ju  tify  i 

Hon  and  n  for.    The  parties  to  a  contract  which  is  wh< 

■  utory  have  a  ri<dit  to  the  maintenam  e  of  the  c<  ntractual  relati 


236  PERFORMANCE  OF  CONTRACT 

up  to  the  time  for  performance,  as  well  as  to  a  performance  of  the 
contract  when  due.  If  it  appear  that  the  party  who  makes  an  absolute 
refusal  intends  thereby  to  put  an  end  to  the  contract  so  far  as  perform- 
ance is  concerned,  and  that  the  other  party  must  accept  this  position, 
why  should  there  not  be  speedy  action  and  settlement  in  regard  to 
the  rights  of  the  parties?  Why  should  a  locus  pcenitentiae  be  awarded 
to  the  party  whose  wrongful  action  has  placed  the  other  at  such  disad- 
vantage? What  reasonable  distinction  per  se  is  there  between  liability 
for  a  refusal  to  perform  future  acts  to  be  done  under  a  contract  in 
course  of  performance  and  liability  for  a  refusal  to  perform  the  whole 
contract  made  before  the  time  for  commencement  oi  perform- 
ance ?     *     *     * 

If  in  this  case  these  ten  hop  contracts  had  been  written  into  one 
contract  for  the  supply  of  hops  for  five  years  in  instalments,  then 
when  the  default  happened  in  October,  1896,  it  cannot  be  denied  that 
an  immediate  action  could  have  been  brought  in  which  damages  could 
have  been  recovered  in  advance  for  the  breach  of  the  agreement  to 
deliver  during  the  two  remaining  years.  But  treating  the  four  out- 
standing contracts  as  separate  contracts,  why  is  it  not  equally  reason- 
able that  an  unqualified  and  positive  refusal  to  perform  them  consti- 
tutes such  a  breach  that  damages  could  be  recovered  in  an  immediate 
action?  Why  should  plaintiff  be  compelled  to  bring  four  suits  instead 
of  one?  For  the  reasons  above  stated,  and  having  reference  to  the 
state  of  the  authorities  on  the  subject,  our  conclusion  is  that  the  rule 
laid  down  in  Hochster  v.  De  la  Tour  is  a  reasonable  and  proper  rule  to 
be  applied  in  this  case  and  in  many  others  arising  out  of  the  transac- 
tions of  commerce  of  the  present  day.     *     *     *    Affirmed.11 


2.  Insolvency  of  Buyer 


DIEM  v.  KOBLITZ. 

(Supreme  Court  of  Ohio,  1892.     49  Ohio  St.  41,  29  N.  E.  1124,  34  Am.  St. 

Rep.   531.) 

See  post,  p.  254,  for  a  report  of  the  case. 

n  See  discussion  of  the  question  in  14  Harvard  Law  Review.  421. 


EIGHT    OF    UNPAID    SELLER    AGAINST    THE    GOODS  237 


RIGHT  OF  UNPAID  SELLER  AGAINST  THE  GOODS 

I.  Seller's  Lien1 


McELWEE  v.  METROPOLITAN  LUMBER  CO. 

(Circuit  Court  of  Appeals,  of  United  States,  Sixth  Circuit,  1893.    G9  Fed.  302, 

16  C.  C.  A.  232.) 

In  Error  to  the  Circuit  Court  of  the  United  States  for  the  Northern 
Division  of  the  Western  District  of  Michigan. 

Action  of  replevin  brought  by  McEhvee  &  Carney  against  the  Met- 
ropolitan Lumber  Company  to  recover  possession  of  certain  lumber 
sold  by  the  defendant  to  Barker  &  Co.  and  claimed  by  the  plaintiff 
as  purchaser  from  Barker  &  Co.  There  was  judgment  for  defend- 
ants, and  plaintiffs  bring  error. 

Before  Taft  and  Lukton,  Circuit  Judges,  and  SevERENs,  Dis- 
trict Judge. 

LURTON,  Circuit  Judge.2  Though  the  agreement  was  originally 
executory,  being  for  the  sale  of  lumber  to  be  manufactured,  yet,  when 
the  product  of  a  particular  month  was  completed,  and  it  had  been 
inspected  and  measured,  there  was  a  complete  bargain  and  sale  of  the 
lumber  thus  designated.  That  particular  lumber  became  appropria 
to  the  contract,  and  the  vendee  under  the  agreement  was  obliged  to 
make  his  promissory  note  to  the  vendor  for  the  price,  payable  90  days 
after  date.  The  element  necessary  to  a  perfect  and  complete  sale 
was  supplied  by  the  appropriation  of  a  particular  lot  of  lumber  to  the 
contract.  In  the  absence  of  a  contrary  intention,  clearly  expressed 
by  other  parts  of  the  contract,  the  right  of  property  and  of  posses- 
sion would  vest  in  the  buyer  upon  the  execution  of  h 
note  payable  to  the  seller.  The  provision  for  a  final  inspection  at 
Escanaba  after  the  delivery  had  begun  was  merely  for  the  correction 
of  errors  before  final  settlement,  and  does  not  operate  tu  the 

umption  that  title  passed  when  the  lumber  was  first  inspected  and 
accepted  and  conditional  payment  made.     *     *     * 

The  passage  of  title  does  not  militate  a  nee  of  a  yen- 

's   lien.      Such   a   lien   arises   upon    l!  ting  of   the    title    in    the 

vendee,  and  is  a  mere  right  of  the  vendor  to  retain  po  i  until 

the  price  is  paid,     [f  the  titli  with  the  vendor,  there  is  no 

lien;   and  this  was  explicitly  stated  to  the  jury,  who  distinctly  found 
in  their  general  v<  that  the  a  had  a  vendor's  lien.    1 1'  such 

a  In  ted  when  appellants  re]  I  the  lumber  involved,  it  ai 

i  For  6  on  "i"  priii.  r  '  Lffany,  Sales  (2d  Ed  I       103    I 

2  The  statement  of  Ca<  I        rewritten  and  part  <>r  the  opinion  is  omitted. 


238  RIGIIT    OF    UNrAID    SELLER    AGAINST    THE    GOODS 

in  consequence  of  facts  occurring-  after  the  vendee  gave  his  original 
notes.  The  agreement  to  give  credit  for  90  days  after  each  install- 
ment of  lumber  was  placed  in  a  deliverable  condition,  and  had  been 
inspected  and  estimated,  was  wholly  inconsistent  with  any  right  of 
the  vendor  to  retain  possession  until  the  price  was  paid.  The  duty 
of  immediate  delivery,  credit  having  been  given  was  wholly  inconsist- 
ent with  a  right  to  hold  as  security  for  the  purchase  price.     *     *     * 

Thus,  after  the  execution  to  the  vendor  of  the  promissory  notes  of 
the  vendee,  the  title  or  right  of  property  and  the  right  of  possession 
to  the  lumber  embraced  within  each  monthly  settlement  were  vested 
in  Barker  &  Co.  The  actual,  manual  possession  was  with  the  Met- 
ropolitan Lumber  Company,  which  was  under  obligation  to  deliver 
to  the  buyer  as  delivery  should  be  required.  Delivery  could  not  be 
refused  unless  one  of  two  things  should  occur  before  the  actual  pos- 
session was  surrendered,  namely,  insolvency  of  the  buyer  or  non- 
payment of  the  price  when  the  credit  expired.  In  case  of  the  hap- 
pening of  either  of  these  contingencies  before  the  actual  possession 
of  the  lumber  passed  from  the  seller  to  the  buyer,  the  vendor's  lien, 
which  had  been  waived  by  a  sale  on  a  credit,  would  revive,  and  the 
vendor  might  lawfully  retain  his  possession  until  the  price  was  paid. 
Even  if  goods  have  been  delivered  to  a  carrier  consigned  to  the  ven- 
dee, and  insolvency  occurs  before  they  reach  the  actual  possession  of 
the  buyer,  the  vendor  may  exercise  the  right  of  stoppage  in  tran- 
situ to  recover  his  possession,  and  thereby  revive  his  lien.  The  right 
of  stoppage  in  transitu  is  but  an  equitable  extension  or  enlargement 
of  the  vendor's  lien,  and  is  not  an  independent  or  distinct  right.  2 
Benj.  Sales  (Corb.  Ed.)  §§  1229-1245 ;  Loeb  v.  Peters,  63  Ala.  249, 
35  Am.  Rep.  17;   Babcock  v.  Bonnell,  80  N.  Y.  244. 

In  the  very  well  considered  case  of  White  v.  Welsh,  38  Pa.  420, 
it  was  said  by  the  court  that:  "Judges  do  not  ordinarily  distinguish 
between  the  retainer  of  goods  by  a  vendor  and  their  stoppage  in  tran- 
situ on  account  of  the  insolvency  of  the  vendee,  because  these  terms 
refer  to  the  same  right,  only  at  different  stages  of  perfection  and  exe- 
cution of  the  contract  of  sale.  If  a  vendor  has  a  right  to  stop  in  tran- 
situ, a  fortiori  he  has  a  right  of  retainer  before  any  transit  has  com- 
menced." "The  rule  is,"  said  the  court,  "that  so  long  as  the  vendor 
has  the  actual  possession  of  the  goods,  or  as  long  as  they  are  in  the 
custody  of  his  agents,  and  while  they  are  in  transit  from  him  to  the 
vendee,  he  has  a  right  to  refuse  or  countermand  the  final  delivery,  if 
the  vendee  be  in  failing  circumstances." 

Unless,  therefore,  the  actual  possession  had  been  surrendered  be- 
fore the  alleged  change  in  the  contract,  to  be  hereafter  considered, 
the  vendor's  lien  would  revive,  in  case  insolvency  occurred  before  de- 
livery or  the  period  of  credit  expired  and  the  price  was  unpaid.  The 
effect  upon  the  vendor's  right  of  the  expiration  of  the  period  of  credit, 
while  the  actual  possession  is  with  the  vendor  is  thus  stated:  "When 
goods  have  been  sold  on  credit,  and  the  purchaser  permits  them  to 


seller's  lien  2.".0 

remain  in  the  vendor's  possession  till  the  credit  has  expired,  the  ven- 
dor's lien,  which  was  waived  by  the  grant  of  credit,  revives  upon  the 
expiration  of  the  term,  even  though  the  buyer  may  not  be  insolvent." 
Benj.  Sales  (Corb.  Ed.)  §  1227. 

This  revesting  of  the  lien  is  not  affected  by  the  fact  that  the  seller 
had  received  conditional  payment  by  promissory  notes  or  bills  of 
exchange,  nor  by  the  fact  that  such  notes  or  bills  had  been  nego- 
tiated so  that  they  were  outstanding  when  they  matured,  or  unmatu 
and  outstanding  when  the  insolvency  occurred.  Benj.  Sales  (Corb. 
Ed.)  §§  1130-1185,  and  note  4;  Valpy  v.  Oakeley,  16  Q.  B.  941 ;  Grif- 
fiths v.  Perry,  1  El.  &  El.  680;  Grice  v.  Richardson,  L,.  R.  3  App, 
Cas.  319;  White  v.  Welsh,  38  Pa.- 420;  Wanamaker  v.  Yerkes,  70 
Pa.  443;  Arnold  v.  Delano,  4  Cush.  (Mass.)  33,  50  Am.  Dec.  754; 
Townley  v.  Crump,  4  Adol.  &  E.  58.  The  liability  of  defendant  in 
error  as  indorser  on  such  notes  as  had  been  negotiated  operated  to 
continue  the  relation  of  an  unpaid  vendor. 

The  right  of  retention  is  not  a  right  of  rescission,  and  it  is  not  es- 
sential to  the  revival  of  the  lien  that  the  notes  of  the  purchaser  shall 
be  delivered  up  or  ready  for  delivery,  though  in  Arnold  v.  Delano, 
cited  above,  it  seems  to  have  been  so  regarded.  If,  after  the  revival 
of  the  vendor's  lien  by  expiration  of  the  credit,  the  seller  extended 
further  credit  by  taking  renewal  notes,  payable  at  a  future  date,  the 
revived  lien  would  be  waived,  unless  there  was  some  agreement  that 
this  further  credit  should  not  have  that  effect,  and  that  the  seller 
should  hold  the  property  as  security  for  the  renewal  notes.  Tin 
of  things  seems  to  have  been  contemplated  by  the  parties;  for,  by  one 
of  the  clauses  of  the  original  contract,  a  provision  was  made  for 
renewals  or  extensions  for  such  time  as  the  lumber  in  the  actual  p 
session  of  the  vendor  when  an  extension  was  granted  should  "re- 
main in  the  possession"  of  the  lumber  company,  "not  exceeding  nin 
days."  The  reasonable  construction  to  be  placed  upon  this  provi 
is  that  the  revived  lien,  resulting  from  the  expiration  of  the  original 
credit,  should  not  be  waived  by  renewal  of  purchase  notes  and  an 
extension  of  credit.  Before  such  extension,  the  buyer  undoubtedly 
had  the  right  of  property  and  right  of  possession.  A  fur  such  re- 
newals, all  right  of  possession  till  the  renewal  notes  were  paid  was 
lost.     Independently  of  the  agi  il  that  extended  credit  should  not 

waive  the  lien  which  had  been  revived  by  expiration  of  original  credit, 
the  insolvency  which  occurred  during  the  running  of  the  r<  nev  al  m 
would  operate  to  revive  the  suspended  lien,  and,  between  vendor  and 
vendee,  or  a  subvendee  standing  on  no  higher  ground  than  the  vendee, 
the  defendant  in  error  bad  a  right  to  hold  thi  m  till  the 

newal  notes  were  paid.  The  authorities  alreadj  cited  fully  sustain 
this  position. 

Aside  from  all  questions  arising  on  the  alleged  modification  of  NTo- 
vember  14,  1892,  and  all  questions  of  i   toppel,  the  rights  of  the 
fendant  in  error,  in  the  actual  i  ion  of  lumber  which  had  nol 


-40  RIGHT    OF    UNTAID    SELLER    AGAINST    THE    GOODS 

been  paid  for,  would  not  be  affected  by  a  sale  to  a  third  person.  Such 
a  subvendee  would  buy  subject  to  the  right  of  the  vendor  to  hold  pos- 
session as  security  for  renewal  notes;  and,  without  regard  to  this 
special  agreement,  a  subvendee  would  take  subject  to  the  possibility 
that  before  possession  was  obtained  the  lien  might  be  revived  by  in- 
solvency of  the  vendee  or  expiration  of  the  stipulated  credit.  These 
considerations  lead  us  to  the  conclusion  that  the  rights  of  the  plain- 
tills  in  error,  as  subvendees,  must,  as  the  learned  judge  who  presided 
at  nisi  prius  instructed  the  jury,  depend  either  upon  questions  of 
estoppel  or  upon  the  legal  effect  of  the  modification  in  the  contract 
as  defeating  any  right  of  lien  in  the  vendor.     *     *     * 

This  brings  us  to  the  legal  effect  of  the  alleged  modifications  of 
November  14,  1892,  upon  the  rights  of  the  parties;  for,  unless  that 
modification  materially  changed  the  agreement,  the  renewals  allowed 
in  February  following  would  continue  a  vendor's  lien  for  the  secu- 
rity of  the  renewal  notes.  Concerning  this  modification,  the  evidence 
tended  to  show  that  the  mill  of  defendant  in  error  closed  down  about 
the  1.1th  or  12th  of  November,  1892.  All  the  lumber  theretofore  cut, 
except  such  as  was  sawed  after  October  31st,  had  been  inspected  and 
settled  for  by  the  notes  of  the  vendee.  The  lumber  sawed  between 
October  31st  and  the  closing  of  the  mill  was  inspected  and  estimated 
under  the  contract,  and  was  in  value  something  over  $9,000.  The 
purchaser  was  not  required,  under  the  contract,  to  give  notes  for  any 
lumber  until  the  end  of  the  month.  Defendant  in  error  wished,  how- 
ever, to  settle  up  this  matter  at  once,  and  therefore  requested  that 
Barker  &  Co.  would  give  their  notes  for  this  remnant  without  waiting, 
as  they  had  a  right  to  do,  until  December  1st.  Barker  &  Co.  were 
at  first  unwilling,  and  the  contention  of  the  plaintiffs  in  error  is  that 
Barker  &  Co.  did  execute  notes  for  the  November  cut,  upon  certain 
concessions  being  made.     *     *     * 

There  is  no  evidence  in  this  record  which  would  justify  a  finding 
that  there  was  an  agreement  that,  after  the  modifications  of  Novem- 
ber 14th,  the  vendors  should  no  longer  remain  in  possession  as  ven- 
dors, but  should  thereafter  hold  as  agent  or  bailee  for  Barker  &  Co. 
Upon  the  contrary,  the  construction  placed  upon  the  agreement,  after 
the  alleged  modifications,  by  both  parties,  was  wholly  inconsistent 
with  any  change  in  the  character  in  which  the  vendor  remained  in 
the  actual  possession.  The  claim  of  Barker  &  Co.  for  an  extension  of 
credit  was  made  upon  the  clause  providing  for  renewals  while  the 
vendors  remained  in  possession,  and  the  whole  correspondence  was 
based  upon  the  theory  that  the  lumber  would  stand  as  a  security  for 
the  renewal  notes.  On  the  evidence  before  the  jury,  it  was  not  error 
to  assume,  as  the  trial  judge  did,  that  at  the  occurrence  of  the  ven- 
dee's insolvency,  there  had  been  no  delivery  to  the  vendee,  either 
actual  or  constructive.  Neither  do  we  think  that  it  would  follow,  if 
there  was  such  evidence,  that  a  mere  agreement,  express  or  implied, 
by  an  unpaid  vendor,  to  hold  possession  as  bailee  or  agent  for  the 


seller's  lien  24:1 

vendee,  would  operate  as  such  a  delivery  to  the  vendee  as  to  prevent 
the  revivor  of  the  vendor's  lien  if  the  vendee  should  fail  before  the 
actual  possession  was  lost.  It  is  to  be  borne  in  mind  that  this  right 
of  the  vendor  springs  out  of  the  relation  of  the  parties  and  the  nat- 
ural equity  that  the  vendor  shall  not  be  compelled  to  complete  a  con- 
tract by  delivery  when  the  vendee  has  not  paid  the  price,  or  by  insol- 
vency becomes  unable  to  carry  out  his  side  of  the  agreement.  *  *  * 
The  conclusion  we  reach  upon  the  foregoing  questions  may  be  sum- 
marized thus : 

1.  That  the  title  and  right  of  possession  passed  to  Barker  &  Co. 
upon  execution  of  their  promissory  notes  as  each  month's  product 
of  finished  lumber  was  inspected  and  received. 

2.  That  during  the  running  of  the  original  notes  no  lien  existed, 
and  during  the  credit  the  vendees  had  a  right  to  demand  and  take 
actual  possession  or  make  subsalcs  to  third  persons. 

3.  That  the  lien  of  the  vendor  would  revive  upon  expiration  of 
the  stipulated  credit,  without  regard  to  the  solvency  of  the  vendee, 
or  upon  the  insolvency  of  the  vendee  before  or  after  maturity  of  pur- 
chase notes,  and  regardless  as  to  whether  such  notes  were  outstand- 
ing or  in  the  hands  of  the  vendor. 

4.  That  the  renewal  of  matured  purchase-money  notes  and  the  ex- 
tension of  a  further  credit  would  operate  as  a  waiver  of  the  lien  which 
had  revived  upon  the  expiration  of  the  original  credit,  unless  there 
was  an  agreement  to  the  contrary. 

5.  That  the  clause  providing  for  renewal  notes  provided  that  this 
extended  credit  should  not  operate  to  waive  the  revived  lien,  by  pro- 
\  iding  that  the  lumber  should  remain  in  the  possession  of  the  ven- 
dors till  the  renewal  notes  were  paid. 

6.  That  there  was  no  evidence  that  the  contract  was  subsequently 
modified  so  that  the  character  in  which  the  vendor  thereafter  held 
possession  should  be  as  bailee  for  the  vendee,  and  not  as  vein' 

7.  That,  were  it  otherwise,  such  an  agreement  would  not  be  such 
a  delivery  to  the  vendee,  or  loss  of  possession  by  the  vendor,  as  would 
prevent  the  assertion  of  a  vendor's  lien  upon  expiration  of  the  I 

or  second  stipulated  credit,  or  upon  the  insolvency  of  the  vendee  he- 
fore  surrender  of  the  actual  possession.  A  fortiori,  an  agreement 
that  the  vendor  should  renew  the  vendee's  notes  and  hold  po: 
till  payment  of  the  renewed  notes  would  be  unaffected  by  the  alleged 
eement  to  hold  a-  1  ailee  for  the  vendee.  The  <>ne  agreement  would 
he  inconsistent  with  the  other  during  the  running  of  the  extended 
lit,  and,  betwi  ndor  and  vendee,  the  agreement  under  which 

notes  were  renewed  would  freemenl  t<>  hold  as  bailee. 

Entertaining  these  views,  it  is  clear  that,  if  the  defendant  in  error 
1  from  a    erting  a  vendor*  upon  the  insolvency  of  the 

.  it  urn  t  be  b  the  plaintiffs  in  error  have  acquired 

as  subpurchasers  which  th<  ■   topped  to  deny  or  contravene 

ilbtCasi    Saw       i'; 


242  RIGHT    OF    UNrAID    SELLER    AGAINST    THE    GOODS 

by  the  assertion  of  a  lien.  What  are  these  rights,  and  what  is  their 
origin?  As  mere  subpurchasers  of  lumber  in  the  actual  possession 
of  the  vendor,  they  only  acquire  the  right  and  interest  of  the  vendee. 
If,  at  the  time  they  bought,  the  vendor  had  no  lien,  no  right  of  re- 
tention, then  they  would  acquire  the  right  to  demand  delivery.  But 
the  right  of  a  vendee  who  has  bought  on  a  credit  is  not  an  absolute 
right  to  demand  delivery.  The  right  is  dependent  upon  the  preserva- 
tion of  his  credit,  and,  if  he  becomes  insolvent  before  he  obtains  actual 
possession,  the  lien  of  the  vendor  revives,  and  the  insolvent  vendee 
must  pay  the  purchase  price  before  he  can  deprive  the  vendor  of  the 
goods  remaining  in  his  possession.  So,  if  the  vendor,  for  any  reason, 
remain  in  the  actual  possession  until  the  period  of  credit  has  expired, 
his  lien  revives. 

Now,  a  subvendee  buys  only  this  defeasible  right  of  the  vendee ; 
and,  if  he  does  not  obtain  the  actual  possession  or  obtain  from  the 
vendor  an  actual  attornment  to  him,  as  in  Hurry  v.  Mangles,  cited 
heretofore,  and  the  credit  given  the  vendee  expires  while  the  vendor 
holds  the  actual  possession,  or  the  vendee  becomes  insolvent,  he  can- 
not, in  the  absence  of  some  estoppel,  deprive  the  unpaid  vendor  of  his 
actual  possession.  The  rights  of  subvendees  have  most  often  been 
under  consideration  in  cases  involving  the  doctrine  of  stoppage  in 
transitu.  But  the  principle  is  the  same  where  transit  has  not  begun. 
It  was  well  said  in  White  v.  Welsh,  38  Pa.  420,  that,  "if  a  vendor 
has  a  right  of  stoppage  in  transitu,  a  fortiori  he  has  a  right  of  re- 
tainer before  any  transit  has  begun."  Now  the  right  of  stoppage  in 
transitu,  special  legislation  out  of  the  way,  can  only  be  defeated  by 
the  transfer  of  a  bill  of  lading  to  an  indorsee  who  bona  fide  gave  value 
for  it.  Benj.  Sales  (Corb.  Ed.)  §  1285;  Lickbarrow  v.  Mason,  1  Smith, 
Lead.  Cas.  (Ed.  1879)  753.  It  will  not  be  defeated  by  a  mere  assign- 
ment while  in  transit,  or  by  an  attachment  by  creditors  of  vendee. 
Benj.  Sales  (Corb.  Ed.)  §  1242;  Mississippi  Mills  v.  Union  &  Plant- 
ers' Bank,  9  Lea  (Tenn.)  318;  White  v.  Mitchell,  38  Mich.  390;  Har- 
ris v.  Pratt,  17  N.  Y.  249;  Umber  Co.  v.  O'Brien,  123  Mass.  12-14; 
Calahan  v.  Babcock,  21  Ohio  St.  281,  8  Am.  Rep.  63;  Stanton  v. 
Eager,  16  Pick.  (Mass.)  476;  Wood  v.  Yeatman,  15  B.  Mon.  (Ky ) 
273 ;  Loeb  v.  Peters,  63  Ala.  243,  35  Am.  Rep.  17.  No  subsale  during 
transit  will  defeat  the  right,  unless  the  bill  of  lading  be  transferred. 
In  the  late  case  of  Kemp  v.  Falk,  L.  R.  7  App.  Cas.  573-582,  it  was 
said  by  Lord  Blackburn  that  "no  sale,  even  if  the  sale  had  actually 
been  made  with  payment,  would  put  an  end  to  the  right  of  stoppage 
in   transitu."     *     *     * 

The  best  that  can  be  said,  favorable  to  plaintiffs  in  error,  is  that  on 
the  5th  of  June,  1893,  they  for  the  first  time  obtained  the  title  and 
right  of  Barker  &  Co.  to  the  specified  lumber  involved  in  this  con- 
troversy. Before  the  title  to  any  part  of  this  lumber  vested,  Barker 
&  Co.  had  failed.  Thereupon,  the  vendor's  lien  reattached,  even  as- 
suming that  it  had  been  suspended  by  reason  of  the  extended  credit, 


seller's  LIEN  24o 

and  had  not  been  saved  as   an   effect  of  the   stipulation  concerning 
renewals.     *     *     * 

If  we  are  right  in  these  conclusions,  it  follows  that  defendant  in 
error  is  entitled  to  assert  its  vendor's  lien.     *     *     *     Affirmed. 


CRUMMEY  v.  RAUDENBUSH. 
(Supreme  Court  of  Minnesota,  1893.    55  Miiiu.  426,  5G  N.  W.  113.) 

Action  by  George  B.  Crummey  against  S.  W.  Raudenbush  for 
breach  of  contract  of  sale.  Judgment  was  ordered  for  defendant,  and 
plaintiff  appeals. 

Mitchell,  J.3  Stated  according  to  its  legal  effect,  the  contract, 
upon  which  this  action  was  brought,  was  an  executory  one  for  the 
sale  of  a  piano  by  defendant  to  plaintiff,  a  part  of  the  price  being  paid 
at  the  date  of  the  contract,  and  the  balance  to  be  paid  in  quarterly  in- 
stallments from  and  after  the  date  of  the  delivery  of  the  piano.  The 
action  is  for  damages  for  a  refusal  to  supply  the  piano  according  to 
the  contract.  It  is  not  alleged  that  the  balance  of  the  price  has  ever 
been  paid  or  tendered,  the  plaintiff  standing  on  the  terms  of  the  con- 
tract that  it  was  to  be  furnished  on  credit.  Much  of  the  answer  con- 
sists of  entirely  irrelevant  matters,  the  only  defense  alleged  being 
that  since  the  making  of  the  contract  the  plaintiff  had  become,  and 
still  is,  insolvent,  and  the  only  important  question  in  the  case  is 
whether  the  defendant  has  established  a  defense  justifying  his  re- 
fusal to  deliver  the  piano  on  that  ground.  Where  a  vendor  con- 
tracts to  sell  personal  property  on  credit,  he  thereby  agrees  to  waive 
his  lien  for  the  purchase  money;  but  he  does  so  on  the  implied  con- 
dition that  the  vendee  shall  keep  his  credit  good.  If,  therefore,  be- 
fore payment,  and  while  the  vendor  still  retains  possession  of  the 
property,  he  d  <  rs  that  the  vendee  is  insolvent,  he  may  hold  the 

goods  as  security  for  the  price.  The  insolvency  of  the  vendee  does 
not  rescind  the  contract,  and  is  not  of  itself  a  ground  for  rescission. 
(t  merely  entitles  the  vendor  to  demand  payment  in  cash  before  part- 
ing with  p<  ion  ol  the  pr<  iperty. 

■  differed  a     to  the  name  to  be  given  to  this  right,  but 

all  recognize  i  t<    ce      Like  the  an         ius  right  of  stop 

e  in  transitu,  it  grows  oul  of  the  vendor's  original  ownership,  and 

dominion,  and  is-   founded   on   the  equitable   principle  that   one   man's 

property  ought  not  to  go  to  pay  another  man's  debt.     The  right  is 

not  limited  to  cases  when-  the  insolvency  of  the  vendee  occurred  aft 

the  date  of  the  contract,  bul  exists  also  even  where  the  insolvency 

I  time,  bul  was  not  di  ed  by  the  vendor  until 

ards;  and,  as   the  |  ption  on  and  law  is  that, 

where  a  vendor  sold  goods  on  credit,  he  believed  that  the  purch; 

8  Part  "i  i  he  opinion  la  omit  ted. 


244  RIGHT    OF    DNrAID    SELLER    AGAINST    THE    GOODS 

was  solvent  and  able  to  pay,  the  burden  is  on  the  vendee  to  prove 
that  the  vendor  had  knowledge  of  the  insolvency  at  the  time,  and 
entered  into  the  contract  with  that  knowledge.  The  right  is  not  af- 
fected by  the  fact  that  part  of  the  price  has  been  paid ;  and  it  makes 
no  difference  whether  the  sale  was  of  a  specific  article  appropriated 
to  the  contract,  or,  as  in  this  case,  a  contract  to  supply  an  article  of 
a  certain  description.  The  term  "insolvent"  is  not  used  in  any  tech- 
nical sense.  It  is  not  necessary  that  the  vendee  should  have  been 
adjudged  a  bankrupt  or  insolvent,  or  have  made  an- assignment  of 
his  property.  Insolvency,  as  applied  to  this  branch  of  law,  means 
a  general  inability  to  pay  one's  debts  or  to  meet  one's  financial  en- 
gagements. Passing  to  the  facts  of  this  case,  an  examination  of  the 
evidence  satisfies  us  that  it  amply  justified  the  trial  court  in  finding 
that  the  plaintiff  was  insolvent  in  the  fullest  sense  of  the  term.  It 
follows  that  defendant  had  a  right  to  refuse  to  deliver  the  property 
without  payment  in  full  of  the  price,  provided  he  properly  asserted 
that  right,  and  had  not  in  some  way  waived  it. 

The  contract  was  made  in  April,  1889.  The  evidence  is  practical- 
ly undisputed  that  for  some  two  years  afterwards  the  defendant  was 
not  only  able  and  ready  to  furnish  the  piano,  but  repeatedly  urged 
the  plaintiff  to  come  and  select  an  instrument,  but  that  he  failed  to 
do  so,  giving  as  a  reason  his  inability  to  meet  the  payments.  Final- 
ly, in  the  winter  or  early  spring  of  1893,  after  defendant  had  ceased 
to  represent  that  make  of  piano  in  the  trade,  and  hence  no  longer 
kept  it  in  stock,  the  plaintiff  for  the  first  time  formally  demanded 
the  delivery  of  the  instrument  within  a  specified  time.  Failing  in 
some  efforts  to  induce  plaintiff  to  accept  a  piano  of  another  kind,  the 
defendant  required  some  assurance  that,  if  he  procured  a  piano  of  the 
kind  called  for  by  the  contract,  the  plaintiff  would  be  ready  to  pay 
for  it  in  cash,  or  give  a  mortgage  on  the  instrument  to  secure  the 
purchase  price.  The  plaintiff  positively  refused  to  agree  to  do  either, 
and  insisted  on  the  terms  of  the  original  contract  for  the  delivery  of 
the  property  on  credit,  which  defendant  as  positively  refused  to  do. 
The  evidence  would  fully  justify  the  conclusion  that  the  defendant 
was  always  willing  to  furnish  the  piano  if  plaintiff  would  pay  the 
price  in  cash,  or  secure  it  by  mortgage  on  the  property,  and  that  his 
refusal  merely  went  to  the  extent  of  refusing  to  furnish  it  on  credit 
without  security.  But  at  no  time  during  the  negotiations  did  de- 
fendant assign  the  insolvency  of  the  plaintiff  as  his  reason  for  de- 
manding cash  or  security,  or  give  any  special  reason  for  doing  so, 
except  that  when  demanding  the  mortgage  he  said  it  was  the  custom 
of  the  trade. 

On  this  ground  plaintiff's  counsel  invoke  the  doctrine  that  if  a 
person,  when  called  upon  to  deliver,  places  his  right  to  retain  the 
goods  upon  a  ground  inconsistent  with  a  claim  by  virtue  of  a  specific 
lien,  this  is  a  waiver  of  the  lien ;  and  that  on  the  trial  he  will  not  be 
permitted  to  rest  his  refusal  on  a  different  and  distinct  ground  from 


seller's  lien  245 

that  on  which  he  claimed  to  retain  the  property  at  the  time  of  the  de- 
mand. An  examination  of  the  authorities  on  the  subject,  from  the 
early  case  of  Boardman  v.  Sill,  1  Camp.  410,  down,  satisfies  us  that 
they  all  proceed  upon  principles  essentially  of  equitable  estoppel, 
and  limit  the  application  of  the  doctrine  invoked  by  counsel  to  cases 
where  the  refusal  to  deliver  the  property  was  put  on  grounds  in- 
consistent with  the  existence  of  a  lien,  or  on  grounds  entirely  inde- 
pendent of  it,  without  mentioning  a  lien.  Thus  it  has  been  repcatedlv 
held  that  a  lien  is  not  waived  by  mere  omission  to  assert  it  as  the 
ground  of  refusal,  or  by  a  general  refusal  to  surrender  the  goods, 
without  specifying  the  ground  of  it,  except  in  certain  cases,  where 
the  lien  was  unknown  to  the  person  making  the  demand,  and  that 
fact  was  known  to  the  person  on  whom  the  demand  was  made.  In 
such  cases,  if  the  ground  of  the  refusal  is  one  that  can  be  removed, 
the  other  party  ought  in  fairness  to  have  an  opportunity  to  do  so. 

But  no  such  state  of  facts  exists  in  this  case.  While  defendant  did 
not  specify  his  vendor's  lien  by  reason  of  plaintiff's  insolvency  as  the 
ground  of  his  refusal,  yet  he  never  placed  his  refusal  on  any  ground 
inconsistent  with  or  independent  of  it.  On  the  contrary,  from  first 
to  last,  what  he  insisted  on  was  payment  of,  or  security  for,  the  price 
of  the  property ;  and  the  ground  of  his  refusal  was  the  refusal  of 
plaintiff  to  give  either.  True,  at  the  last,  he  announced  his  positive 
refusal  to  furnish  the  piano  unless  plaintiff  would  agree  to  give 
a  chattel  mortgage  on  it, — a  thing  which  he  had  no  legal  right  to 
insist  on;  but  it  is  very  evident  that  this  demand  on  defendant's  part 
was  merely  an  alternative  for  payment  in  cash,  which  he  had  a  right 
to  demand,  but  which  plaintiff  had  refused.  The  plaintiff  probably 
had  a  right  to  be  informed,  as  he  was,  that  the  property  was  held  for 
the  purchase  money,  for  that  was  a  matter  which  he  could  remedy  by 
ment,  but  it  would  have  availed  him  nothing  to  be  informed  that 
u'lant's  right  to  retain  the  property  for  the  price  was  based  on 
his  insolvency,  for  that  was  a  fact  which  he  could  not  have  changed. 
We  can  see  nothing  in  defendant's  acts  of  omission  or  commission 
that  amounted  to  a  waiver  of  his  title,  or  which  should  estop  him  from 
now  asserting  it.     *     *     *    Affirmed. 


24.6  RIGHT    OF    UNPAID    SELLER    AGAINST    THE    GOODS 

II.  Stoppage  in  Transitu  4 
1.  Against  Whom  Right  may  be;  Ex^rcisSd 


KINGMAN  v.  DENISON. 

(Supreme  Court  of  Michigan,  1S91.    S4  Mich.  COS,  48  N.  W.  2G,  11  L.  It.  A.  347, 

22  Am.   St.  Rey.  711.) 

Replevin  by  Kingman  &  Co.  against  William  C.  Denison  and  the 
McCormick  Harvesting  Machine  Company.  There  was  a  judgment 
in  defendants'  favor,  and  plaintiffs  bring  error. 

Long,  J.5  On  July  8,  1889,  defendant  Denison  wrote  the  plain- 
tiffs at  Peoria,  111.,  ordering  5,000  pounds  of  twine.  No  dealings 
had  ever  been  had  between  the  parties  prior  to  that  time.  The  plain- 
tiffs received  the  letter  next  day,  and  at  once  wrote  Denison :  "We 
have  entered  your  order,  and  twine  will  go  forward  to-morrow." 
On  July  11th  the  twine  was  shipped  to  W.  C.  Denison,  Grand  Rap- 
ids, Mich.,  plaintiffs  taking  shipping  bill  from  the  railroad  company 
there,  and  on  same  day  sent  it  to  Denison,  with  statement  of  ac- 
count for  value  of  the  twine.  The  twine  was  received  at  Grand 
Rapids  by  the  Grand  Rapids  &  Indiana  Railroad  Company,  July  17th, 
and  on  the  18th  they  turned  it  over  to  a  teamster,  who  delivered  it 
at  the  store  which  was  occupied  by  Denison  at  the  time  the  order  was 
made.  It  appears  that  on  July  9th  the  Grand  Rapids  Savings  Bank 
caused  an  attachment  to  be  levied  upon  Denison's  property.  On 
that  evening  Denison  gave  the  bank  a  chattel  mortgage  on  all  the 
goods  in  the  store,  and  at  a  warehouse  there,  and  a  store  situate  at 
another  place  outside  of  Grand  Rapids.  July  10th,  11th,  and  12th 
he  gave  mortgages  on  the  same  property  to  the  bank  and  several 
other  creditors,  two  of  them  being  given  to  the  defendant  the  Mc- 
Cormick Harvesting  Machine  Company.  The  goods  mortgaged 
were  held  in  the  store  by  the  agents  of  the  bank  until  they  were  sold 
under  one  of  the  mortgages,  which  was  about  July  18th,  at  which 
time  the  defendant  the  McCormick  Harvesting  Machine  Company 
bid  the  goods  in,  and  continued  to  occupy  the  store,  putting  Mr. 
Denison  in  as  their  agent.  The  McCormick  mortgage  contained  a 
clause,  after  a  description  of  the  property  mortgaged,  as  follows : 
"And  all  additions  to  and  substitutes  for  any  and  all  the  above- 
described  property."  On  September  7th  plaintiffs,  who  had  no  notice 
or  knowledge  of  the  changed  condition  of  Mr.  Denison's  affairs,  drew 
on  him  at  sight  for  the  amount  of  the  bill.  This  draft  was  not  paid, 
and  on  September  14th  plaintiffs  wrote  him  for  prompt  remittance, 

4  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  106-109^. 
e  Part  of  the  opinion  is  omitted. 


STOPPAGE  IN  TRANSITU  247 

which  was  not  made.  On  September  19,  1889,  plaintiffs  brought 
replevin  against  the  defendants  for  the  twine,  finding  about  one- 
half  of  it;  the  balance  having  been  sold  out  of  the  store  by  the  Mc- 
Cormick  Harvesting  Machine  Company.  On  the  trial  of  the  cause 
the  defendants  waived  return  of  the  property,  and  had  verdict  and 
judgment  against  the  plaintiff  for  $351.91,  the  value  of  the  twine 
taken,  and  costs.     Plaintiffs  bring  error. 

Tlie  plaintiffs  asked  the  court  to  instruct  the  jury  that  plaintiffs 
were  entitled  to  a  verdict;  and  in  the  ninth  request  asked  an  instruc- 
tion that  "if  Mr.  Denison  did  not  in  fact  receive  the  twine  at  his 
store,  but  was  not  there  when  it  was  delivered,  and  never  received 
and  accepted  it  for  his  use  in  any  way,  except  that,  finding  it  in  the 
store,  he  allowed  the  mortgagees  to  assume  control  of  it,  plaint  ill's 
could  retake  it  as  against  him."  And  in  the  tenth  request  it  was 
asked  that  the  jury  be  instructed  that  the  McCormick  Company,  as 
mortgagee,  is  in  no  better  position  than  Mr.  Denison.  Its  mortgage 
does  not  cover  this  twine,  nor  is  it  a  bona  iv.lc  purchase.  The  court, 
in  its  charge  to  the  jury,  stated:  "Plaintiff  claims  the  right  to  the 
possession  of  these  goods  at  the  time  this  suit  was  commenced — 
First,  because  they  were  ordered  by  Mr.  Denison  at  a  time  when  he 
was  insolvent,  and  had  no  intention,  or  at  least  no  reasonable  ex- 
pectation, of  paying  for  them  according  to  the  terms  of  the  con- 
tract; and  counsel  also  claims  the  right  of  stoppage  in  transit.  All 
I  need  to  say  in  regard  to  the  latter  claim  is  that  I  think  the  right 
of  stoppage  in  transit,  under  the  facts  in  this  case  as  shown  by  the 
evidence,  has  no  application  whatever;  there  is  no  such  right  exist- 
ing." This  part  of  the  charge  relating  to  the  right  of  stoppage 
in  transit  is  assigned  as  error. 

The  court  was  in  error  in  refusing  these  requests  to  charge  and  in 
the  charge  as  given.  It  is  not  seriously  contended  here  but  that, 
under  the  evidence  given  on  the  trial,  the  defendant  Denison  was  in- 
solvent at  the  time  the  goods  were  ordered.  At  leasl  this  wa 
question  of  fact  which  should  have  been  submitted  t»>  the  jurj  ;  ami.  if 
so  found,  the  question  of  the  right  of  stoppage  in  transit  was  an  im- 
portant question   in   (he   case.     The  right  of  Stoppage  in  transit   is  a 

right  possessed  by  the  seller  to  reassume  the  possession  <>i  g Is 

paid  for  while  on  their  way  to  tin-  vendee,  in  case  the  vendee  becomes 
insolvent  before  he  lias  acquired  actual  possession  of  them.  It  i 
privilege  allowed  to  the  seller  ior  the  particular  purpose  of  proteel 
him  from  the  insolvency  of  the  consignee,  The  right  i^  one  highl) 
I  in  the  law,  being  based  upon  the  plain  reason  of  justice  and 
equity  that  on.-  man's  property  should  nol  lie  applied  to  the  payment 
of  another  man's  debts.     Gibson  v.  Carruthers,  8  Me<      i     A     337. 

Bui    it    is   prop,  i  i  ed   only    upon   goods   which   are    in    p 

and  ar.-  in  tin-  hand  ime  intermediate  person  between  the  ven 

dor  and  vendee  in  proce  i,  and  tor  the  pui  if  delivery,  and  this 

right  may  be  exercised   whether  the  insolv* 


24S  RIGHT    OF    UNPAID    SELLER    AGAINST    THE    GOODS 

the  sale  or  occurs  at  any  time  before  actual  delivery  of  the  goods, 
without  the  knowledge  of  the  consignor.  O'Brien  v.  Norris,  16  Md. 
122,  77  Am.  Dec.  284;  Reynolds  v.  Railway  Co.,  43  N.  H.  580;  Blum 
v.  Marks,  21  La.  Ann.  268,  99  Am.  Dec.  725 ;  Benedict  v.  Scaettle, 
12  Ohio  St.  515.  This  right  of  stoppage  in  transit  will  not  be  de- 
feated by  an  apparent  sale,  fraudulently  made,  without  consideration, 
for  the  purpose  of  defeating  the  right.  There  must  be  a  purchase 
for  value  without  fraud,  to  have  this  effect.  Harris  v.  Pratt,  17  N. 
Y.  249. 

In  the  present  case  it  appears  that  the  goods  arrived  in  Grand 
Rapids  July  17th,  and  were  taken  to  the  store  on  the  18th.  Mr. 
Denison  was  not  in  the  store  at  the  time  they  were  taken  in.  Mr. 
Talford  was  in  possession  of  all  the  goods  and  of  the  store  at  this 
time  for  all  the  mortgagees,  and  after  the  sale  under  the  mortgage 
the  McCormick  Company  took  possession,  and  were  in  possession 
at  the  time  this  replevin  suit  was  commenced.  The  testimony  tends 
to  show  that  at  the  time  demand  was  made  upon  the  McCormick 
Company  and  Mr.  Denison  for  the  twine  Mr.  Denison  stated  that  he 
thought  the  plaintiff,  having  heard  of  his  financial  affairs,  would  not 
ship  the  twine,  and  that  he  did  not  know  it  had  been  shipped  until  it 
was  in  the  store ;  and  he  was  very  sorry  it  had  come,  under  the  cir- 
cumstances. The  McCormick.  Company  claimed  that  by  the  terms 
of  their  mortgage  they  were  entitled  to  hold  it.  The  court  was  in 
error  in  not  submitting  to  the  jury  the  question  whether  the  goods- 
had  come  actually  to  the  possession  of  Mr.  Denison.  The  circum- 
stances tend  strongly  to  show  that  he  never  had  actual  possession  of 
them,  and  never  claimed  them  as  owner.  He  had  made  the  order, 
and  was  notified  that  they  would  be  shipped;  but  from  that  time 
forward  it  is  evident  that  he  made  no  claim  to  them.  The  McCor- 
mick Company  claimed  that  they  passed  to  them  under  the  terms  of 
their  mortgage.  They,  however,  stood  in  no  better  position  than 
Denison.  If  the  goods  never  actually  came  into  the  possession  of 
Denison  as  owner,  the  mortgage  lien  would  not  attach,  even  under 
the  clause  in  the  mortgage  covering  after-acquired  property.  They 
do  not  stand  in  the  position  of  bona  fide  purchasers  of  the  property. 
The  right  of  stoppage  could  not  be  divested  by  a  purchase  of  the 
goods  under  the  mortgage  sale.  The  transit  had  not  ended  unless 
there  was  actual  delivery  to  Mr.  Denison.  These  were  questions  of 
fact  for  the  jury,  which  the  court  refused  to  submit.  If  the  jury  had 
found  that  Denison  was  insolvent  at  the  time  the  order  was  made,,  or 
became  insolvent  at  any  time  before  the  claimed  delivery  of  the 
goods,  and  that  the  goods  were  never  actually  delivered  to  the  pos- 
session of  Mr.  Denison,  then  the  vendors'  rights  would  have  been 
paramount  to  any  right  which  the  McCormick  Company  could  have 
acquired  at  the  mortgage  sale.  Underhill  v.  Booming  Co.,  40  Mich. 
660;  Lentz  v.  Railway  Co.,  53  Mich.  444,  19  N.  W.  138;  White  v. 
Mitchell,  38  Mich.  390;  James  v.  Griffin,  2  Mees.  &  W.  623. 


STOPPAGE   IN   TRANSITU  249 

In  the  view  we  have  taken  of  the  case,  we  think  the  other  ques- 
tions raised  are  unimportant,  and  we  will  not  pass  upon  them.  The 
judgment  of  the  court  below  must  be  reversed,  with  costs,  and  new- 
trial  ordered.     The  other  justices  concurred. 


2.  Termination  op  Transit 


SYMNS  v.  SCHOTTEN. 
(Supreme  Court  of  Kansas,  1SS6.    35  Kan.  310,  10  Pac.  S28.) 

Action  by  A.  B.  Symns  &  Co.  against  the  Emporia  Mercantile 
Association,  for  goods  sold  and  delivered.  Plaintiff  attached  certain 
goods  in  the  possession  of  the  Atchison,  Topeka  &  Santa  Fe  Railroad 
Company  consigned  to  defendant.  Wm.  Schotten  &  Co.  intervened, 
claiming  the  goods  as  sellers  to  the  defendant.  There  was  judgment 
in  favor  of  the  interveners,  and  plaintiff  brings  error.8 

Johnston,  J.  The  only  question  to  be  decided  in  this  case  is 
whether  Wm.  Schotten  &  Co.,  who  interpleaded  in  the  action,  had  a 
right,  under  the  facts,  to  reclaim  the  goods  which  they  had  sold  to 
the  Emporia  Mercantile  Association.  It  is  agreed  that  the  goods 
were  sold  on  credit,  and  that  after  the  sale,  and  before  their  arriv.nl 
at  the  point  of  destination,  the  consignee  became  insolvent.  The 
right  of  the  vendors  to  repossess  themselves  of  the  goods  at  any  ti 
while  they  were  on  the  road,  and  prior  to  their  arrival  at  Emporia, 
is  conceded.  But  it  is  claimed  that  because  the  goods  had  reached  the 
tit  to  which  they  were  shipped,  and  had  been  unloaded  from  tin- 
cars,  and  placed  in  the  warehouse  of  the  railroad  company,  the 
transitus  was  at  an  end,  and  the  vendors'  right  of  stoppage  was 
tinguished.  The  right  of  stoppage  in  transitu  is  not  so  limited  a  one 
as  the  plaintiff  would  make  it.  It  is  one  which  the  law  Favors,  and 
is  said  to  be  founded  upon  the  just  principle  that  one  man's  pi 
erty  shall  not  be  applied  in  payment  of  another  man's  debts,  and  the 
courts  have  been  inclined  to  encourage,  rather  than  to  restrict,  the 
exercise  of  the  right.  The  general  rule  is  thai  the  vendor  may 
Btime  possession  of  the  goods  at  any  time  before  they  actually  reach 
thepos  on  of  the  vendee.  This  right  continues  in  the  vendor,  tlOl 
only  while  the  goods  are  being  carried  to  die  place  of  con  ignment, 
may  be  exercised  at  any  time  until  the  delivery  to  the  vendee  or 
nt  has  been  completed.  The  unloading  of  the  goods,  and  the 
placing  of  them  in  the  ouse  "f  tin-  railroad  company,  does  nol 

necessarily  terminate  tin-  transitus,  nor  put  an  end  to  the  righl 

«  The  ■  tatement  ot  fa<  i    Is  rewi  Itten, 


-50  RIGHT    OF    UNrAID    SELLER    AGAINST    THE    GOODS 

stoppage ;  so  long  as  they  remain  in  the  hands  of  the  carrier  or  mid- 
dle-men  as  such,  the  right  does  not  cease. 

There  may  be  cases  where  the  possession  of  the  carrier  or  ware- 
houseman, after  the  final  destination  is  reached,  will,  owing  to  the 
agreement  of  the  parties,  or  the  special  circumstances  of  the  case, 
be  regarded  as  the  possession  of  the  vendee,  and  so  put  an  end  to 
the  vendor's  right  of  stoppage.  But  where  goods  are  consigned  and 
shipped  in  the  ordinary  way,  and  the  railroad  company  which  brings 
i hem  to  the  point  of  delivery,  in  performance  of  its  duty  as  carrier, 
unloads  and  places  the  goods  in  its  warehouse  awaiting  the  payment 
of  freight  charges  before  delivery  to  the  vendee,  the  presumption  will 
be  that  the  goods  are  still  in  transit,  and  that  the  right  of  stoppage 
yet  remains  in  the  vendor.  In  an  Ohio  case  quite  analogous  to  the 
one  at  bar,  certain  goods  that  had  been  consigned  and  shipped  in  the 
usual  way  were  transferred  by  the  railroad  company  to  its  warehouse 
at  the  station  to  which  the  goods  were  consigned,  and  near  to  which 
the  vendee  resided  and  did  business,  there  to  await  the  payment  by 
him  of  the  charges  thereon  as  a  condition  precedent  to  their  removal 
and  delivery  at  his  business  house ;  and  it  was  held  that  the  transfer 
did  not,  ipso  facto,  constitute  a  delivery  of  possession  to  the  vendee, 
but  was  to  be  regarded  as  a  reasonable  exercise  of  the  duty  by  the 
carrier  in  the  course  of  their  transit,  and  as  connected  with  the  orig- 
inal employment  of  the  company  as  agent  of  the  vendor  to  transport 
and  deliver,  and  therefore  did  not  preclude  the  vendor's  right  of 
stoppage  in  transitu.  It  was  recognized  that  in  some  instances  the 
carrier  or  middle-man  might  become  the  agent  of  the  vendee,  and 
hold  possession  for  the  vendee,  but  it  was  said  that  such  "agency  will 
not  be  implied  from  the  carrier's  original  employment,  and  can  arise 
only  by  showing  affirmatively  some  arrangement  or  understanding  to 
that  effect  other  than  the  general  words  of  an  ordinary  consignment." 
Calahan  v.  Babcock,  21  Ohio  St.  281,  8  Am.  Rep.  63.  There  is  no 
conflicting  authority  upon  the  question  presented  here,  and  no  neces- 
sity for  a  review  of  the  decided  cases.  Among  many  others  which 
might  be  cited  in  support  of  the  views  expressed,  we  refer  to  the  fol- 
lowing: Rucker  v.  Donovan,  13  Kan.  251,  19  Am.  Rep.  84;  O'Neil 
v.  Garrett,  6  Iowa,  480;  Buckley  v.  Furniss,  15  Wend.  (N.  Y.)  137; 
Covell  v.  Hitchcock,  23  Wend.  611;  Harris  v.  Pratt,  17  N.  Y.  249; 
Loeb  v.  Peters,  63  Ala.  243,  35  Am.  Rep.  17;  Newhall  v.  Vargas,  13 
Me.  93,  29  Am.  Dec.  489;  Inslee  v.  Lane,  57  N.  H.  454;  Hoover  v. 
Tibbits,  13  Wis.  79;  Atkins  v.  Colby,  20  N.  H.  155;  Blackman  v. 
Pierce,  23  Cal.  508. 

The  record  of  this  case  discloses  nothing  from  which  we  might  in- 
fer that  the  carrier  was  the  agent  of  the  vendee.  The  goods  were 
sold  and  consigned  in  the  ordinary  course  of  business  between  mer- 
chants, and  when  they  arrived  at  Emporia  they  were  taken  out  ot 
the  cars  by  the  railroad  company,  and  placed  in  its  warehouse,  and 
there  held,  in  its  character  as  carrier,  to  await  the  payment  of  charges 


STOPPAGE    INT   TRANSITU  27)1 

and  a  delivery  to  the  consignee.  The  railroad  company  had  not  de- 
livered the  goods  to  the  vendee,  and  in  that  respect  its  duty  as  car- 
rier was  incomplete.  The  freight  was  never  paid,  nor  have  the  go 
ever  reached  the  possession  of  the  vendee.  The  transitus,  therefore, 
had  not  terminated,  and  the  vendor's  right  of  stoppage  continued  nut- 
withstanding  the  seizure  made  under  the  attachment  sued  out  by  the 
plaintiff.  The  cause  was  rightly  decided  by  the  district  court,  and 
its  judgment  will  be  affirmed. 


BECKER  v.  HALLGARTEN. 

(Court  of  Appeals  of  New  York,  1SS1.     S6  N.  Y.  1CT ) 

Action  for  conversion.     YVilhelm  &  Boemer,  merchants  in  Berlin, 
Germany,  sold  to  Boas  &  Stern,  of  the  same  place,  certain  goods  on 
credit,  giving  them  invoices  of  the  same.     The  goods  were  shipped 
by  direction  of  the  purchasers  to  one  Becker,  the  plaintiff,  in  Bremen. 
Boas  &  Stern  borrowed  3,000  marks  of  one  Goldstein,  a  banker   in 
Berlin,  on  the  security  of  the  goods  and  the  bills  of  lading,  directing 
Becker    to   hold   them    subject    to    Goldstein's    order,    who    directed 
Becker  to  ship  them  to  defendants,  Hallgarten  &  Co.,  of  Xew  York. 
Goldstein  wrote   defendants   informing  them   of  the    shipment,   and 
directed  them  to  deliver  the  goods  to  one  L.  Stern,  of  New  York,  on 
payment  by  him  of  the  Goldstein  loan  and  expenses.    Becker  shipped 
the  goods  on  August  4th  to  defendants,  with  bills  of  lading  made  out 
in  his  name  as  shipper,  directing  delivery  of  the  goods  to  defendai 
One  bill  of  lading  he  mailed  to  defendants,  directing  deliver}   of  the 
ds  to  L.  Stern,  as  instructed  by  Goldstein.    The  duplicate  bill  of 
lading  was  forwarded  to  Boas  &  Stern,  who  sent  it  to  Goldstein,  who 
forwarded  it  to   defendants,  directing  the   same   disposition   of  the 
goods  by  them.     Becker  cabled  defendants  on  August    19th,  on  be 
half  of  the  vendors,  stopping  the  goods  in  transit,  and  they 
to  hold  them  for  plaintiff's  account.    The  vendors  afterwards  assigned 
to  plaintiff  their  claims  against  the  purchasers  for  an  accepted  draft 
and  balance  of  account.    Under  the  laws  of  Germany,  goods  cov< 
by  bills  of  lading  can  be  transferred  only  by  written  indorsement  on 
the  bills  by  the  consignee.    Thi        i  til  to  defendant  were  not  indoi 
Plaintiff  tendered  defendants  their  charges,  and  demanded  the  goods. 

Danforth,  J.     Keeker  was  at  no  time  in   the  course  oi    thi 
transactions  the  agent  or  representative  of  the  vendors.     Until  and 
including  the  shipment  of  the  goods  he  was  the  agenl  of  Boas  & 
rn,  the  vendees,  or  of  Goldstein.     He  obeyed,  as  was  proper,  at 
the  different  of  the  affair,  first  one  and  then  the  other  of  tin 

narti--.    [f  hi  il  character  ceased  with  the  shipment,  he  neither 

r»ntered  the  employ  of  the  vendors,  nor  did  he  acl  under  any  instruc 
tion  received  in itn  them.    Tlie  finding  thei  that  in  behalf  of  the 

vendors  he  -topped  the  goods  is  without  evidi  ipport  it. 


252  RIGHT    OF    UNPAID    SELLER.    AGAINST    THE    GOODS 

Assuming,  in  the  next  place  (for  the  purpose  only  of  this  discus- 
sion,) that  by  the  assignment  above  set  out  he  became  vested  with  a 
vendor's  right  to  stop  goods  while  on  their  way  to  an  insolvent  pur- 
chaser, it  is  one  which  we  think  cannot  be  exercised  in  this  case,  for 
the  reasons :  First,  that  the  transit  was  over  before  the  goods  left 
Germany.  They  were  sent  by  the  vendors  to  Becker,  as  the  vendees' 
agent  at  Bremen.  The  shipment  was  preceded  by  and  was  in  conse- 
quence of  a  request  by  B.  &  S.  to  the  vendors  "to  send  the  boxes"  to 
Becker  "at  our  disposition."  Therefore,  on  the  28th  of  July,  inform- 
ing Becker  of  the  shipment  to  him,  "at  the  request  of  and  for  account 
of  Messrs.  B.  &  S.  of  Berlin,"  they  write,  we  have  sent  you  part  ot 
the  goods  in  question  and  "request  you  to  carry  out  the  further  in- 
struction of  said  parties  concerning  the  same;"  and  in  the  next  let- 
ter, communicating  the  shipment  of  the  balance,  they  say,  "and  re- 
quest you  hereby  to  let  Messrs.  B.  &  S.  have  the  further  disposal 
thereof.*'  It  is  obvious  then  that  the  impulse  impressed  upon  the 
goods  by  the  vendors  carried  them  only  to  Bremen.  Some  other  ac- 
tion was  necessary  on  the  part  of  the  vendees  before  they  moved 
again.  They  at  that  point  transferred  the  goods  to  Goldstein,  and 
made  them,  in  the  hands  of  Becker,  subject  to  his  order.  The  trial 
court  finds  not  only  a  "taking  of  the  goods  by  him  as  security,"  but 
that  Boas  &  Stern  "directed  Becker  to  hold  and  ship  the  goods  ac- 
cording to  Goldstein's  directions."  This  was  done.  The  bills  of  lad- 
ing were  issued  in  favor  of  strangers  to  the  vendees,  and  who  rep- 
resent a  party  having  actual  custody  and  the  right  of  disposition.  The 
shipment  and  the  consignment  by  the  vendors  ended  at  Bremen.  At 
that  place  new  interests  attached,  in  promotion  of  which  the  goods 
were  sent  forward.  The  only  consignment  by  W.  &  B.  was  to  Becker 
at  Bremen. 

It  has  been  held  that  the  delivery  to  the  vendee,  which  puts  an 
end  to  the  state  of  passage,  may  be  at  a  place  where  he  means  the 
goods  to  remain  until  a  fresh  destination  is  communicated  to  them  by 
orders  from  himself.  Valpy  v.  Gibson,  4  C.  B.  837 ;  Biggs  v.  Barry,  2 
Curt.  259;  Bolton  v.  L.  &  Y.  R.  W.  Co.,  L.  R.,  1  C.  P.  439.  Also 
Dixon  v.  Baldwen,  5  East,  175 ;  and  this  case  is  approved  in  Covell 
v.  Hitchcock,  23  Wend.  611.  In  the  case  before  us  it  is  plain  that 
they  had  reached  the  place  for  which  they  were  intended,  under  the 
direction  given  by  the  vendors,  and  had  come  under  the  actual  con- 
trol of  the  vendees.  Dixon  v.  Baldwen,  supra,  is  commented  upon  in 
Harris  v.  Pratt,  17  N.  Y.  249,  and  distinguished  from  the  rule  thought 
applicable  to  the  facts  of  that  case.  There  the  suspense  in  transporta- 
tion was  temporary,  and  to  be  resumed  at  a  future  time  in  the  direc- 
tion already  given  by  the  vendors.  But  in  the  case  before  us  not 
only  is  the  actual  fact  like  that  in  Dixon  v.  Baldwen,  but  if  the  de- 
tention at  Bremen  was  originally  intended  only  to  give  the  vendees  an 
opportunity  to  determine  by  which  of  several  routes  or  at  what  time, 
as  in  Harris  v.  Pratt,  the  goods  should  go  on,  we  have  the  additional 


STOPPAGE   IN     TRANSITU  J233 

vital  circumstances  before  adverted  to  of  a  complete  possession  and 
control  by  the  vendees  and  its  transfer  to  a  third  party,  who  also  took 
the  actual  possession  and  control  of  the  goods,  and  has  since  retained 
them.  Neither  Harris  v.  Pratt  nor  any  of  the  other  cases  cited  by  the 
appellant  go  to  the  extent  of  upholding  the  vendor's  lien  in  such  a  case. 

Second.  The  transaction  between  Goldstein  and  the  vendees  was 
effectual  to  pass  the  property  to  him  and  so  deprive  the  vendors  of 
the  right  of  stoppage  if  it  otherwise  existed.  That  right  may  always 
be  defeated  by  indorsing  and  delivering  a  bill  of  lading  of  the  goods 
to  a  bona  fide  indorsee  for  a  valuable  consideration,  without  notice 
of  the  facts  on  which  the  right  of  stoppage  would  otherwise  exist. 
This  was  held  in  Lickbarrow  v.  Mason,  2  T.  R.  63,  and  has  since  been 
deemed  established.  It  does  not  impair  the  force  of  this  position  that 
the  money  was  in  fact  advanced  before  the  delivery  of  the  bill  of  lad- 
The  goods  were  in  the  possession  of  Goldstein  when  he  paid 
over  the  money.  The  bill  of  lading  was  promised  and  was  part  of 
the  consideration  on  which  the  money  was  paid,  but  more  than  all  he 
had  the  right,  under  the  authority  given  to  him  by  B.  &  S.,  to  take  the 
bill  of  lading  in  any  form,  and  it  was  made  out  for  his  benefit.  City 
Bk.  v.  R.  Co.,  44  N.  Y.  136.  Nor  is  it  material,  unless  made  so  by 
the  German  law  (infra),  that  the  bill  of  lading  was  not  indorsed.  It 
was  not  necessary  that  it  should  be.  Hallgarten  &  Co.  were  Gold- 
stein's agents,  subject  to  his  control,  and  in  making  the  bill  of  lading 
in  their  names  as  consignees  all-  was  effected  which  the  indorsement 
of  a  bill  taken  in  the  name  of  B.  &  S.  would  have  accomplished.  The 
cases  cited  by  the  respondent  (Meyerstein  v.  Barber,  L.  R.,  2  C.  1 '. 
45  ;  Short  v.  Simpson,  1  id.  255),  show  that  a  bill  so  indorsed  has  the 
same  effect,  even  if  the  ship  containing  the  goods  was  at  sea,  as  de- 
livery of  the  goods  themselves.  Here  there  was  a  delivery  of  the 
goods  to  Goldstein,  and  the  bill  of  lading  followed  the  possession. 

Third.  The  German  law,  as  set  out  in  evidence,  has  no  application 
to  the  case  in  hand.    It  applies  when  the  bill  of  lading  is  i  in  the 

name  of  the  vendee  or  of  some  person  through  whom  the  party  claim- 
ing its  benefit  must  make  title.  The  observations  already  made  show 
that  in  our  opinion  this  is  not  the  plaintiff's  position.  Nor  are  the 
ndants  estopped  from  disputing  the  plaintiff's  title.  There  is  no 
finding  of  any  fact  upon  which  such  doctrine  can  rest;  no  change  ol 
position  by  the  plaintiff;  a  promise  at  most  by  the  defendants  with- 
out consideration,  in  violation  of  duty  to  their  principals  and  in  fraud 
of  their  rights.  If  it  forms  the  foundation  of  any  action,  it  cannot  be 
I    of  which   is   to   deprive  a  third  party  of   his  property, 

subject  the  defendant  to  a  second  action  by  the  real  owner  of  the 
ds.    The  right  of  stoppage,  when  ii  i  pends  upon  equity, 

and  thai  of  the  dei'  ii<l;:  virtue  of  their  representative  character, 

uperior  in  any  view  to  the  plainl  [f  liable  at  all,  it  would  be 

n  their  assumpsit  to  keep  th  Is  on  hi  unt.    But  what  dam- 

could  the  plaintiff  show   from  the  brea  tent   to 


254  EIGHT    OF    UNTAID    SELLER    AGAINST    THE    GOODS 

keep  for  him,  or  subject  to  his  order,  goods  to  which  another  person 
was  entitled,  and  whose  claim  was  as  to  him  exclusive? 

Some  other  grounds  are  urged  by  the  respondent  on  which  he  claims 
the  judgment  may  be  sustained.  They  have  been  examined,  and  are 
deemed  untenable.  The  reasons  for  this  conclusion  need  not  be  stated, 
since  however  decided,  they  would  be  insufficient  to  overcome  the  ap- 
pellants' objections  which  have  been  already  declared  well  taken.  The 
judgment  appealed  from  should  be  reversed  and  a  new  trial  granted, 
with  costs  to  abide  the  event. 


III.  Right  of  Resale  7 


DIEM  v.  KOBLITZ. 

(Supreme  Court  of  Ohio,  1S92.     49  Ohio  St.  41,  29  N.  E.  1124,  34  Am.   St. 

Rep.  531.) 

Action  by  Koblitz  Bros,  against  F.  J.  Diem.  There  was  judgment 
for  plaintiffs,  and  defendant  brings  error. 

Williams,  C.  J.8  The  contract  of  the  parties,  as  shown  by  the 
pleadings,  was  one  for  the  sale  of  goods  on  credit ;  the  plaintiffs  agree- 
ing to  give  their  commercial  paper  for  the  purchase  price,  payable  at 
the  times  stipulated.  As  no  time  was  specified  in  the  contract  for  the 
delivery  of  the  goods,  the  defendant's  obligation  was  to  deliver  them 
when  the  plaintiffs  gave  their  commercial  paper,  as  they  agreed  to  do, 
or  within  a  reasonable  time.  The  petition  avers  that  the  plaintiffs 
were  at  all  times  ready  to  perform  their  part  of  the  contract,  and  that 
they  requested  performance  by  the  defendant,  which  was  by  him  re- 
fused. The  answer  denies  these  averments,  and  alleges  that  the  plain- 
tiffs became  and  were  insolvent,  and  their  commercial  paper  dishon- 
ored ;  and  upon  this  information  coming  to  the  defendant,  after  part 
of  the  goods  had  been  delivered  to  the  carrier  for  shipment,  he  stopped 
them  in  transit,  resumed  possession,  and  afterwards  resold  them,  with 
the  other  goods  included  in  the  contract,  for  the  same  price  plain- 
tiffs were  to  pay  for  them.  The  reply  denies  the  insolvency  of  the 
plaintiffs,  and  avers  that  they  accepted  drafts  drawn  by  defendant  on 
them  for  the  whole  purchase  price  of  the  goods,  payable  in  accordance 
with  the  contract.  The  view  which  the  court  below  took  of  the  case 
was  that  the  resale  of  the  goods,  as  alleged  in  the  answer,  was  a  breach 
of  the  contract  by  the  defendant,  which  gave  the  plaintiffs,  notwith- 
standing their  insolvency,  an  immediate  right  of  action  against  him 
for  damages.    Hence,  proof  of  the  insolvency  of  the  plaintiffs  was  ex- 

7  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  110. 

s  The  statement  of  facts  is  abridged  and  part  of  the  opinion  is  omitted. 


RIGIIT   OF   RESALE  255 

eluded  as  immaterial,  and  the  case  was  submitted  to  the  jury  as  in- 
volving no  inquiry  except  the  amount  of  the  plaintiffs'  damages. 

We  do  not  understand  it  to  be  claimed  that  the  defendant,  upon 
learning  of  the  plaintiffs'  insolvency,  might  not  lawfully  retake  the 
goods  while  they  were  yet  in  the  custody  of  the  carrier,  nor  that  he 
was  bound  to  deliver  any  part  of  the  goods  so  long  as  the  insolvency 
of  the  plaintiffs  continued.  The  claim  is  that  the  right  of  the  vendor 
in  such  case  is  simply  to  retain  possession  of  the  property  until  the 
purchase  price  is  paid,  and  therefore  a  resale  by  him  before  the  ex- 
piration of  the  credit  puts  it  out  of  his  power  to  deliver  to  the  first 
vendee,  and  so  constitutes  a  breach  of  the  contract  with  him,  for  which 
he  may,  though  insolvent,  maintain  a  special  action  for  damages. 
Whether  this  claim  is  correct  or  not  is  the  principal  question  in  the 
case. 

The  right  of  stoppage  in  transitu  is  the  right  of  the  vendor  to  re- 
sume possession  of  the  goods  sold,  while  they  are  in  transit  to  the  ven- 
dee, who  is  insolvent  or  in  embarrassed  circumstances.  Actual  insolven- 
cy of  the  vendee  is  not  essential.  It  is  sufficient  if,  before  the  stoppage 
in  transitu,  he  was  either  in  fact  insolvent,  or  had,  by  his  conduct  in 
business,  afforded  the  ordinary,  apparent  evidences  of  insolvency. 
Xor  is  the  vendor's  right  abridged  or  in  any  way  affected  by  the  fad 
that  he  has  received  the  vendee's  bills  of  exchange  or  other  negotiable 
securities  for  the  whole  price,  even  though  they  have  been  negotiated, 
and  are  still  outstanding.  It  seems  to  be  well  settled  that  when  the 
right  of  stoppage  in  transitu  is  properly  exercised  the  effect  is  to  re- 
store the  vendor  to  precisely  the  same  position  as  if  the  goods  had 
never  left  his  possession.  He  has  the  same  rights  with  respect  to  the 
property,  and  they  may  be  enforced  in  the  same  way.  I  lis  right  to 
intercept  the  goods  before  they  reach  the  hands  of  the  vendee,  and 
his  right  to  withhold  those  still  in  his  possession,  rest  upon  the  same 
just  principle,  that  the  insolvent  vendee  cannot  require  the  veinl.ii-  to 
deliver  the  goods  or  perform  the  contract  when  he  himself  is  unable 
to  pay  for  them  or  perform  the  contract  on  his  part.  To  require  the 
goods  to  be  delivered  to  such  vendee  would  simply  be  applying  the 
property  of  one  man  to  the  payment  of  another  man's  d<  I 

The  righl  of  the  unpaid  vendor  with  respect  to  th  >me- 

times  called  a  "lien;*'   and  it  is  a  lien,  in  the  thai  the  vendee, 

upon  paymenl  or  tender  of  the  price,.bu1  no1  otherwise,  may  recover 
them.    I'm  it  i-  something  more  than  a  n  mmon  law  lien,  winch  i 

only  a  naked  right  of  |  ion.     With  the^goods  in  his  p  ion, 

the  vendor  hi  :cial  property  in  them,  which  is  parcel  "f  I 

inal  rship.     Whether  thi  I  of  the  stoppage  in  transitu,  or 

the  retention  of  the  by  the  vendor,  on  th  ■  if  the  v 

Ivency,  is  to  rescind  the  contract,  or  not,  has  been  the  sub 
f.t"  much  ion  :    and 

definitely  settled.     Bui  the  prevail  pinion  now  is,  we  believe,  thai 

the  contract  is  not  i  rily  re  cinded,  unl<      the  i  by  i 


256  RIGHT    OF    UNPAID    SELLER    AGAINST    THE    GOODS 

conduct  so  treat  it,  which  conclusion  is  most  favorable  to  the  vendor, 
for  whose  protection  the  doctrine  of  stoppage  in  transitu  was  first 
established';  for,  if  the  exercise  of  the  right  operated  to  rescind  the 
contract,  the  vendor  would  be  deprived  of  the  remedy  which  it  is  now 
generally  conceded  he  has,  in  a  proper  case,  upon  a  resale  of  the  goods. 
to  hold  the  vendee  or  the  assignee  of  his  estate  for  the  loss  sustained 
through  his  non-performance  of  the  contract,  or  in  consequence  of  a 
fall  in  the  market  price.  And  as  the  stoppage  does  not  rescind  the  con- 
tract of  sale,  it  follows  that  the  vendee  or  his  assignee  may  obtain  the 
goods  on  payment  of  the  price,  or,  if  the  vendee  was  able  and  ready 
to  perform  the  contract  on  his  part,  he  may  recover  damages  for  the 
failure  of  the  seller  to  deliver  the  property  according  to  its  terms. 

But  can  the  vendee  maintain  such  action  if  he  is  not  able  to  per- 
form? And  does  his  insolvency  at  the  time  fixed  for  the  delivery  of 
the  property  amount  to  such  inability?  Or,  where  the  sale  is  upon 
credit,  does  a  resale  of  the  property  by  the  vendor  before  the  expira- 
tion of  the  time  of  the  credit  give  the  insolvent  vendee,  notwithstand- 
ing his  inability  to  pay  for  the  goods,  a  right  of  action  against  the 
vendor  for  the  difference  between  the  contract  price  and  their  market 
value  at  the  time  of  the  resale?  As  an  authority  sustaining  the  right 
of  the  vendee  to  maintain  such  an  action  against  his  vendor,  Bloxam 
v.  Sanders,  4  Barn.  &  C.  941,  is  cited,  where  Bayley,  J.,  says:  "If 
goods  are  sold  upon  credit,  and  nothing  is  agreed  upon  as  to  the  time 
of  delivering  the  goods,  the  vendee  is  immediately  entitled  to  the  pos- 
session, and  the  right  of  possession  and  the  right  of  property  vested  at 
once  in  him ;  but  his  right  of  possession  is  not  absolute.  It  is  liable 
to  be  defeated  if  he  becomes  insolvent  before  he  obtains  possession. 
Whether  default  in  payment  when  the  credit  expires  will  destroy  his 
right  of  possession,  if  he  has  not  before  that  time  obtained  actual  pos- 
session, and  put  him  in  the  same  situation  as  if  there  had  been  no 
bargain  for  credit,  it  is  not  now  necessary  to  inquire,  because  this  is 
a  case  of  insolvency,  and  in  case  of  insolvency  the  point  seems  per- 
fectly clear.  If  the  seller  has  dispatched  the  goods  to  the  buyer,  and 
insolvency  occurs,  he  has  a  right,  in  virtue  of  his  original  ownership, 
to  stop  them  in  transitu.  Why?  Because  the  property  is  vested  in 
the  buyer,  so  as  to  subject  him  to  the  risk  of  any  accident;  but  he  has 
not  an  indefeasible  right  to  the  possession,  for  his  insolvency,  without 
payment  of  the  price,  defeats  that  right.  And  if  this  be  the  case  after 
he  has  dispatched  the  goods,  and  while  they  are  in  transitu,  a  fortiori 
is  it  when  he  has  never  parted  with  the  goods,  and  when  no  transitus 
has  begun.  The  buyer,  or  those  who  stand  in  his  place,  may  still  ob- 
tain the  right  of  possession,  if  they  will  pay  or  tender  the  price,  or 
they  may  still  act  upon  the  right  of  property,  if  anything  unwarrant- 
able is  done  to  that  right.  If,  for  instance,  the  original  vendor  sell 
when  he  ought  not,  they  may  bring  a  special  action  against  him  for 
the  injury  they  sustain  by  such  wrongful  sale,  and  recover  damages  to 
the  extent  of  that  injury;   but  they  can  maintain  no  action  in  which 


EIGHT   OF   EESALE  237 

right  of  property  and  right  of  possession  are  both  requisite,  unless 
they  have  both  those  rights." 

Still  the  question  remains,  when  is  the  resale  wrongful?  And  what 
is  necessary  on  the  part  of  the  vendee  to  enable  him  to  maintain  the 
action  for  the  resale  is  not  decided,  nor  does  it  appear  to  have  been 
a  question  in  the  case.  The  action  was  trover,  to  the  maintenance  of 
which  the  right  of  possession  was  essential.  In  Smith's  Leading  Cases, 
(volume  1,  pt.  11,  p.  1199),  in  the  note  to  Lickbarrow  v.  Mason,  2 
Term  R.  63,  it  is  said :  "Supposing  the  contract  of  sale  not  to  be 
rescinded,  it  seems  to  follow  that  the  goods,  while  detained,  remain  at 
the  risk  of  the  vendee,  and  that  the  vendor  can  have  no  right  to  resell 
them,  at  all  events  until  the  period  of  credit  is  expired.  After  that 
period,  indeed,  the  refusal  of  the  vendee  or  his  representatives  to  re- 
ceive the  goods  and  pay  the  price  would  probably  be  held  to  entitle 
the  vendor  to  elect  to  rescind  the  contract."  The  only  authority  cited 
in  support  of  the  note  above  quoted  is  Langfort  v.  Tiler,  Salk.  113, 
from  an  examination  of  which  it  will  be  seen  that  it  does  not  meet  the 
question.     *     *     * 

When  the  sale  is  upon  credit,  it  is  one  of  the  implied  conditions  of 
the  contract  that  the  vendee  shall  keep  his  credit  good;  his  promise 
to  pay  at  a  future  day  involving  an  engagement  on  his  part  that  he 
will  remain  and  then  be  able  to  pay,  which  engagement  is  broken 
when  he  becomes  insolvent  and  unable  to  pay ;  and  hence  the  right 
of  the  vendor  to  then  stop  performance  of  the  contract  on  his  part. 
Nor  is  the  rule  varied  by  the  fact  that  the  vendee  has  given  his  nolo 
or  bills  or  other  securities  for  the  price,  payable  at  the  end  of  the 
time  for  which  the  credit  is  allowed.  The  vendor,  in  such  case,  in- 
curs no  liability  by  not  delivering  the  property,  unless  the  vendee  pay 
or  tender  the  contract  price.  But,  in  order  to  sue  the  vendee,  he  should 
offer  to  deliver  according  to  the  contract.  Such  is  the  scope  of  the 
rule  laid  down  in  Mining  Co.  v.  Brown,  124  U.  S.  385,  8  Sup-  Ct.  531, 
31  L.  Ed.  424,  where  it  is  held:  "The  insolvency  of  the  vendee  in  a 
contract  for  the  sale  and  future  deliver)'  of  personal  property  in 
installments,  payment  to  be  made  in  notes  of  the  vend  ich  in- 

stallment is  delivered,  'is  sufficient  to  justify  the  vendor  for  refus 
ing  to  continue  the  delivery,  unless  payment  lie  made  in  cash;'    hut 
it  does  not  absolve  him  from  offering  to  deliver  the  property  in  ] 
formance  of  the  contract,  if  he  intends  to  hold  the  purcha  irty 

to  it.     lie  cannot  ;:  ipon  dama  >r  non-performance  by  the 

insolvent  without  showing  performance  on  hi-  own  part,  or  an  offer  to 

perform,  with  ability  to  make  the  offer  good."     Tin-  rule  musl  work 
both  way-.     The  right-  and  obligations  of  the   vendor  and   vendee 
correlative.     If  the  insolvency  of  the  vendee  i  ienl  to  justify 

the  vendor  in  ri  i  to  deliver  tin  prop<  rty  unli  menl  he  m 

in  cash,  it  follows  that  the  vendor  incurs  no  liability  by  hi     n  in  .,1. 
and  thi  e  no  righl  of  action  accrues  to  the  vendee,  unlei     i 

CoolbyGa  es  Sali      -17 


258  RIGHT    OF    UNPAID    SELLER    AGAINST    THE    GOODS 

ment  be  made  by  him ;  and  if  the  vendor  cannot  insist  upon  damages 
for  the  vendee's  non-performance  without  showing  an  offer  on  his 
part,  with  the  ability,  to  perform,  so  neither  can  the  vendee,  if  he  is 
without  the  ability  to  perform,  recover  from  the  vendor.     *     *     * 

But  it  is  contended  that,  while  the  vendor  may  refuse  to  deliver  the 
property  to  the  insolvent  vendee,  he  is  obliged  to  keep  it  for  the  ven- 
dee until  the  time  of  the  credit  expires,  and  if  he  resell  before  that 
time  the  vendor  may  have  his  action  for  damages.  When,  by  the  con- 
tract, the  property  is  to  be  delivered  at  a  future  day,  and  the  vendor 
sells  it  to  another  before  that  time  arrives,  the  vendee,  being  able  to 
perform,  may  have  an  immediate  action ;  for  the  vendor,  by  thus  dis- 
abling himself  from  performing  by  delivery  at  the  proper  time,  com- 
mits a  breach  of  the  contract,  and  the  vendee  need  not  wait  until  the 
time  for  the  delivery  arrives.  But  that  rule  has  no  application  here. 
The  obligation  of  the  vendor,  under  a  contract  like  that  between  the 
parties  in  this  case,  is  to  deliver  the  goods  at  the  time  stipulated  in 
the  agreement,  which  is  at  once,  upon  the  receipt  or  tender  of  the 
purchaser's  commercial  paper,  or  within  a  reasonable  time, — not  at 
the  time  to  which  the  credit  is  extehded.  The  right  of  the  vendee,  is 
to  receive  the  goods  at  the  time  the  vendor  contracts  to  deliver  them, 
and  he  is  not  bound  to  receive  them  at  any  other  time.  The  breach, 
therefore,  on  the  part  of  the  vendor,  if  there  be  one,  consists  in  his 
failure  to  deliver  the  goods  according  to  the  contract,  and  occurs  at 
that  time,  and  not  upon  a  resale  subsequently  made ;  and  the  vendee's 
cause  of  action  arises,  if  at  all,  upon  the  failure  to  deliver,  and  not 
on  the  resale. 

In  the  case  now  before  us  the  averments  of  the  defendant's  answer, 
which  on  the  trial  he  was  not  permitted  to  prove,  though  he  offered 
to  do  so,  show  that  at  the  time  the  goods  were  to  have  been  delivered, 
according  to  the  contract  of  sale,  the  plaintiffs  were  insolvent  and  their 
paper  dishonored,  so  that  the  condition  upon  which  their  right  to  the 
goods  depended  had  not  been  performed  by  them,  and  they  were  with- 
out the  necessary  ability  to  perform  the  same.  Upon  what  just  prin- 
ciple can  the  seller,  in  such  a  case,  be  required  to  hold  the  goods  until 
the  expiration  of  the  credit?  It  is  true  that  at  that  time  the  vendee  may 
again  be  solvent,  and  able  to  pay.  There  is  no  presumption  or  assur- 
ance that  he  will.  If  any  presumption  arises,  it  is  rather  that  the  in- 
solvency will  continue,  which  is  more  in  accordance  with  the  experi- 
ence of  the  commercial  world.  But,  as  we  have  seen,  it  is  part  of  the 
vendee's  engagement  that  he  will  maintain  his  credit,  which  is  broken 
by  his  insolvency.  And  it  would  be  unjust  to  require  the  vendor  to 
sustain  the  loss  resulting  from  the  destruction  or  deterioration  of  the 
goods  in  the  mean  time,  which  in  many  instances  must  ensue  if  the 
seller  is  compelled  to  keep  the  goods  shut  up,  and  take  the  risks  of  the 
future  solvency  of  the  buyer.  The  injustice  of  such  a  requirement  is 
conceded  where  the  goods  are  of  a  perishable  nature ;  and  the 
vendor,   it  is  now   settled,  is   not  obliged   to   keep  goods   of  that 


EIGHT   OF   KESALE  -50 

character  until  the  termination  of  the  credit.  In  the  notes  to  Lick- 
barrow  v.  Mason,  in  Smith's  Leading  Cases,  (volume  1,  pt.  11,  p.  1199,) 
it  is  said:    "But  what,  it  will  be  said,  if  the  goods  be  perishable 

a  nature  that  the  vendor  cannot  keep  them  until  the  time  of  credit  has 
expired?  In  such  a  case  it  is  submitted  that  courts  of  law,  having  orig- 
inally adopted  this  doctrine  of  stoppage  in  transitu  from  equity,  would 
act  on  equitable  principles  by  holding  the  vendor  invested  with  an  im- 
plied authority  to  make  the  necessary  sale." 

It  is  insisted,  however,  that  the  right  of  sale  in  such  cases  constitul 
an  exception  to  the  rule.  In  our  opinion  the  reasons  upon  which  the 
exception  rests,  if  it  be  such,  should  make  the  exception  the  general 
rule.  The  value  of  many  kinds  of  merchandise,  not  perishable,  de- 
pends largely  upon  their  being  in  the  market  at  the  appropriate  sea- 
sons, and  to  supply  temporary  demands;  and,  if  not  available  for 
those  purposes  at  the  proper  time,  they  become  comparatively  worth- 
less, or  so  reduced  in  value  as  to-  entail  great  loss,  which  may  be  less 
only  in  degree,'  though  greater  in  amount,  than  where  the  goods  are 
perishable;  and  it  is  no  more  just  or  equitable  to  subject  the  vendor 
to  the  loss  in  the  one  case  than  in  the  other.  The  right  of  resale  ought 
not,  we  think,  be  made  to  depend  upon  the  degree  or  extent  of  the  1 
that  must  ensue  if  it  be  denied.  It  rests  upon  a  different  principle,  and 
grows  out  of  the  failure  of  the  vendee  to  keep  his  engagement.  Not 
that  the  contract  is  thereby  rescinded,  for  that  would  defeat  the  \ 
dor's  remedy  for  damages  upon  resale  after  due  notice,  but  that  he 
may  elect  to  treat  the  agreement  for  the  credit  as  at  an  end,  on  account 
of  the  vendee's  default.  We  see  no  good  reason  for  holding  that  the 
rights  of  the  seller  are  any  the  less  where  the  sale  is  upon  credit,  and 
the  property  is  retained  by  him  on  account  of  the  buyer's  insolvency, 
than  they  would  be  if  the  sale  were  for  cash,  and  the  vendee  was  un- 
able to  pay  tbe  price  agreed  upon.  In  either  case  the  incapacity  of  the 
vendee  to  perform  his  part  of  the  agreement — and  insolvency  is  in- 
capacity— warrants  the  vendor  in  withholding  performance  on  his  i 

We  are  therefore  of  opinion  the  trial  court  erred  in  excluding  the 
evidence  of  the  plaintiffs'   insolvency,   and   in  charging   the  jurj 

A'li  in  the  I  of  the  case,  and  also  in  refusing  the  ii 

tion  requested  by  tl  ndant  therein  contained.    Counsel  ha 

d  a  question  relating  to  the  charge  of  the  courl  on  the  n 
dan  bm,  2     io  i    ceptibn  was  taken  to  the  charge  on 

.  it  will  n<>t  be  further  noticed,     For  the  errors  mention 
the  judgments  below  are  reversed,  and  th<  emanded  for  fui 

ther  proceedings. 


Di  N  v.  McANDREW. 

(Coram!    Ion  of  Appeals  of  Mew   JTork,   1870,     M   N.   Y.  72J 
post,  p.  2i  I '.  '"''  3  report  of  the 


1?G0  RIGHT    OF    UNPAID    SELLER    AGAINST    THE    GOODS 


IV.  Right  to  Rescind  9 


DUSTAN  v.  McANDREW. 

(Commission  of  Appeals  of  New  York,  1870.     44  N.  T.  72.) 

Action  for  breach  of  contract.  On  August  24,  1860,  J.  S.  &  W. 
Brown,  of  the  city  of  New  York,  executed  an  agreement  with  the 
plaintiff  as  follows :  "In  consideration  of  the  sum  of  one  dollar,  the  re- 
ceipt of  which  is  hereby  acknowledged,  we  have  sold  this  day  to  Mr. 
John  F.  Dustan,  of  this  city,  100,000  pounds  of  first  sort  western  or 
eastern  hops  as  we  may  select;  growth  of  1860;  deliverable  in  the 
city  of  New  York,  at  our  option,  during  the  months  of  October  or 
November,  1860,  at  seventeen  cents  per  pound,  subject  to  Mr.  J.  S. 
Brown's  inspection,  or  other  mutually  satisfactory.  Terms,  cash  on 
delivery.  Mr.  Dustan's  name  to  be  made  satisfactory  either  by  in- 
dorsement or  by  a  deposit  of  $2,500  by  both  parties.  J.  S.  &  W. 
Brown." 

On  September  7,  the  plaintiff  sold  this  contract  to  the  defendants, 
by  an  instrument  as  follows:  "In  consideration  of  the  sum  of  one 
dollar,  the  receipt  of  which  is  hereby  acknowledged,  I  have  this  day 
sold  to  McAndrew  &  Wann  the  contract  of  J.  S.  &  W.  Brown,  dated 
24th  August,  1860,  for  100,000  pounds  first  sort  hops,  western  or  east- 
ern, growth  of  1860;  upon  condition  that  the  said  McAndrew  &  Wann 
fulfill  the  conditions  of  said  contract  to  the  said  J.  S.  &  W.  Brown,  and 
pay  to  me,  in  addition,  on  delivery  of  the  hops,  ten  and  one-half  cents 
per  pound.    John  F.  Dustan.    New  York,  September  7,  1860." 

On  November  28,  J.  S.  &  W.  Brown  notified  the  plaintiff  by  letter, 
that  they  would  deliver  the  hops  pursuant  to  contract  on  the  30th  of 
that  month;  and  plaintiff  immediately,  on  the  same  day,  notified  the 
defendants  of  that  fact,  inclosing  to  them  the  letter  of  J.  S.  &  W. 
Brown ;  and  on  the  same  day  the  said  J.  S.  &  W.  Brown  wrote  a  simi- 
lar letter  to  the  defendants.  These  notices  actually  came  to  the  hands 
of  the  defendants  on  the  morning  of  the  30th. 

Prior  to  November  30,  John  S.  Browfi  had  inspected  the  hops  and 
put  his  brand  upon  them,  and  certified  that  they  were  such  hops  as  the 
contract  called  for.  On  November  30,  J.  S.  &  W.  Brown  were  ready 
and  willing  to  deliver  the  hops,  and  the  defendants  were  requested  to 
take  them,  and  they  declined  on  the  sole  ground  as  they  claimed,  that 
they  had  not  had  an  opportunity  to  examine  them  and  inspect  their 
quality,  and  because  Messrs.  Brown  had  refused  to  let  an  inspector 
whom  they  sent,  inspect  the  hops. 

o  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  111. 


RIGHT   TO   RESCIND  201 

On  December  24  the  plaintiff  took  the  hops  from  Messrs.  Brown 
and  paid  for  them,  and  on  the  same  day  wrote  the  following  letter  to 
defendants:  "New  York,  December  24th,  1860.  Messrs.  McAndrew 
&  Wann :  Gentlemen. — The  100,000  pounds  hops  mentioned  in  con- 
tract of  J.  S.  &  W.  Brown  with  me,  of  24th  August,  I860,  and  in 
contract  of  yourselves  with  me  of  7th  September,  1860,  are  now  at 
the  store  No.  4  Bridge  street,  awaiting  the  fulfillment  by  you  of  the 
terms  of  your  contract,  and  I  hereby  tender  to  you  the  said  hops,  ami 
demand  from  you  the  payment  of  the  sum  of  $27,500,  the  amount  of 
such  contract  price.  Unless  you  comply  with  the  terms  of  said  con- 
tract, on  or  before  the  26th  day  of  December,  instant,  I  will  proceed  to 
sell  the  same  on  your  account  and  hold  you  for  any  deficiency.  Your 
obedient  servant,  John  F.  Dustan." 

Defendant  still  declined  to  take  the  hops,  and  then  on  December 
26  plaintiff  placed  them  in  the  hands  of  a  hop  broker,  who  sold  them 
for  twenty  cents  per  pound. 

The  plaintiff  also  gave  evidence  that  on  November  30  and  on  De- 
cember 26  twenty  cents  per  pound  was  the  fair  market  value  of  the 
hops;  and  the  defendants  gave  evidence  that  on  both  of  these  days  the 
market  value  was  some  cents  higher.  There  was  also  evidence  showing 
that  hops  had  a  downward  tendency  in  market  all  through  the  month 
of  December.  It  was  shown  that  the  hops  in  all  respects  answered  the 
contract.     Judgment  for  plaintiff. 

Earl,  C.  The  contract  required  that  the  hops  should  be  in- 
spected by  J.  S.  Brown,  or  some  other  inspector  satisfactory  to  both 
parties.  In  case  J.  S.  Brown  could  not  or  should  not  inspect  them  for 
any  reason,  then  they  were  to  be  inspected  by  some  other  person  mu- 
tually satisfactory.  Neither  party  had  the  right  to  demand  any  other 
inspector,  unless  Brown  neglected  or  refused  to  inspect.  It  is  doubt- 
less unusual  to  insert  a  stipulation  in  contracts  that  the  vendor  shall 
inspect  the  goods  sold.    But  where  parties  agree  to  this  they  musl 

'id  by  their  contract,  and  it  must  be  construed  the  same  as  if  some 
other  person  had  been  chosen  inspector. 

It  is  claimed  on  the  part  of  the  respondent,  and  was  held  by  the  court 
below,  that  the  inspection  provided  for  was  intended  simply  for  the 
convenience  of  the  vendors,  to  enable  them  to  perform  their  contract, 
and  that  it  merely  fur;  prima   :  e  that  the  h 

red  the  contract,  and  that  the  in  pection  was  not  conclusive  upon 
the  parti        I  cannot  assent  to  this.     The  contract  was  for  the 
and  purcha    ■  of  hop    of  a  certain  description,  and  the  of  the 

pection  was  to  determine  for  the  benefit  of  both  parties   whether 
they  ai  I  that  description.    Until  the  vendors  delivered  the  hop- 

with  the  inspection,  the  \  ot  obliged  to  pay,  and  when 

ed,  the  vend  re  entitled  to  the  purchase-pi  o       The 

inspection  was  tlms  as  much  for  the  convenience  and  benefit  of  ■ 
party  as  the  other.     Its  purpose,  like  similar  pn 


2(52  RIGHT    OF    UNPAID    SELLER    AGAINST    THE    GOODS 

of  contracts,  was  to  prevent  dispute  and  litigation  at  and  after  perform- 
ance. But  if  the  inspection  was  merely  for  the  convenience  of  the  ven- 
dors, then  they  could  dispense  with  it,  and  compel  the  vendees  to  take 
the  hops  without  any  inspection  whatever.  And  if  it  was  merely  prima 
facie  evidence  of  the  quality  of  the  hops,  then  it  was  an  idle  ceremony, 
because  not  being  binding,  the  vendee  could  still  dispute  the  quality  of 
the  hops,  refuse  to  take  them,  and  show,  if  he  could,  when  sued  for 
not  taking  them,  that  they  did  not  answer  the  requirements  of  the 
contract ;  and  thus  the  plain  purpose  for  which  the  provision  was  in- 
serted in  the  contract  would  be  entirely  defeated. 

The  inspection  could  be  assailed  for  fraud,  or  bad  faith  in  making 
it,  and  perhaps  within  the  case  of  McMahon  v.  New  York  &  Erie  R. 
Co.,  20  N.  Y.  463,  because  made  without  notice  to  the  vendee.  The 
inspection  here  was  made  without  notice ;  but  it  is  not  necessary  to  de- 
termine whether  this  renders  it  invalid,  as  no  such  defense  was  inti- 
mated in  the  answer  or  upon  the  trial. 

By  the  purchase  of  the  contract  the  defendants  were  substituted,  as 
to  its  performance,  in  the  place  of  the  vendee  therein  named,  and  were 
bound  to  do  all  that  he  had  agreed  to  do  or  was  bound  in  law  to  do. 
When  notified  that  the  hops  were  ready  for  delivery  they  declined  to 
take  them,  upon  the  sole  ground  that  they  had  not  had  an  opportunity 
to  examine  or  inspect  them ;  and  they  claimed  that  they  had  sent  one 
Smith  to  inspect  them,  and  that  he  had  been  declined  permission  to 
inspect  them.  There  was  no  proof  however  that  they  ever  tried  to 
examine  or  inspect  the  hops,  or  that  the  vendors  ever  refused  to  per- 
mit them  to  examine  or  inspect  them.  They  sent  Smith  to  inspect 
them,  and  he  went  to  one  of  the  several  storehouses  where  some  of  the 
hops  were  stored,  and  he  says  he  was  there  refused  an  opportunity  to 
inspect  them  by  Mr.  A.  A.  Brown.  But  there  is  no  proof  that  he  was 
in  any  way  connected  with  the  vendor,  or  that  he  had  any  agency  or  au- 
thority whatever  from  them.  There  was  no  proof  that  defendants 
ever  tried  with  the  vendors  to  agree  upon  any  other  inspector,  or  that 
they  ever  asked  the  vendors  to  have  the  hops  inspected  by  any  other 
inspector,  and  they  made  no  complaint  at  any  time  that  they  were 
inspected  without  notice  to  them.  The  point  that  they  should  have  had 
notice  of  the  inspection  was  not  taken  in  the  motion  for  a  nonsuit,  nor 
in  any  of  the  requests  to  the  court  to  charge  the  jury.  If  the  point  had 
been  taken  in  the  answer  or  on  the  trial,  the  plaintiff  might  perhaps 
have  shown  that  notice  was  given  by  the  vendors,  or  that  it  was  waived. 

Hence  we  must  hold,  upon  the  case  as  presented  to  us,  that  there  was 
no  default  on  the  part  of  the  plaintiff  or  the  vendors,  and  that  the 
defendants  were  in  default  in  not  taking  and  paying  for  the  hops.  The 
only  other  question  to  be  considered  is,  whether  the  court  erred  in  the 
rule  of  damages  adopted  in  ordering  the  verdict. 

The  court  decided  that  the  plaintiff  was  entitled  to  recover  the  dif- 
ference between  the  contract  price  and  the  price  obtained  by  the  plain- 


BIGHT   To   RESCIND  263 

tiff  upon  the  resale  of  the  hops,  and  refused,  upon  the  request  of  the 
defendants,  to  submit  to  the  jury  the  question  as  to  the  market  value 
of  the  hops  on  or  about  the  30th  day  of  November. 

The  vendor  of  personal  property  in  a  suit  against  the  vendee  for 
not  taking  and  paying  for  the  property,  has  the  choice  ordinarily  of 
either  one  of  three  methods  to  indemnify  himself.     (1)  He  ;  .ore 

or  retain  the  property  for  the  vendee,  and  sue  him  for  the  entire  pur- 
chase-price; (2)  He  may  sell  the  property,  acting  as  the  agent  for  this 
purpose  of  the  vendee,  and  recover  the  difference  between  the  con- 
tract price  and  the  price  obtained  on  such  resale;  or  (3)  lie  may  keep 
the  property  as  his  own,  and  recover  the  difference  between  the  mar- 
ket price  at  the  time  and  place  of  delivery  and  the  contract  price.  2 
Pars.  Cont.  4S4;  Sedgw.  Dam.  282;  Lewis  v.  Greider,  49  Barl 
Pollen  v.  Le  Roy,  30  X.  Y.  549.  In  this  case  the  plaintiff  chose  and 
the  court  applied  the  second  rule  above  mentioned.  In  such  case  the 
vendor  is  treated  as  the  agent  of  the  vendee  to  make  the  sale,  and  all 
that  is  required  of  him  is  that  he  should  act  with  reasonable  care  and 
diligence,  and  in  good  faith.  He  should  make  the  sale  without  unnec- 
essary delay,  but  he  must  be  the  judge  as  to  the  time  and  place  of 
sale,  provided  he  act  in  good  faith  and  with  reasonable  care  and  dili- 
gence. Here  it  is  conceded  that  the  sale  was  fairly  made;  it  was 
made  in  the  city  of  New  York,  in  less  than  one  month  from  the  time 
the  defendants  refused  to  take  the  hops.  It  was  not  claimed  on  the 
trial  that  the  delay  was  unreasonable,  and  we  can  find  nothing  in  the 
case  to  authorize  us  to  hold  that  it  was  unjustifiable. 

We  are  therefore  of  the  opinion  that  the  court  did  not  err  as  to  the 
rule  of  damages.  The  judgment  should  therefore  be  affirmed,  with 
costs. 


-<J4  ACTIONS    FOR    BREACH    OF    CONTRACT 


ACTIONS  FOR  BREACH  OF  CONTRACT 

1.  Remedies  of  the  Seller — Damages  for  Nonacceptance  * 


UNEXCELLED   FIREWORKS   CO.   v.   POLITES. 

(Supreme  Court  of  Pennsylvania,  1S90.    130  Pa.  536,  18  Atl.  1058,  17  Am.  St. 

Rep.   7SS.) 

Clark,  J.  This  is  an  action  of  assumpsit,  brought  July  20,  1888, 
to  recover  the  price  of  a  certain  lot  of  fireworks  and  celebration  goods, 
ordered  by  the  defendant,  George  Polites,  from  the  Unexcelled  Fire- 
works Company,  of  New  York,  in  February,  1888.  The  first  order, 
which  was  for  his  store  in  Newcastle,  was  given  through  the  plain- 
tiff's agent,  Alexander  Morrison,  and  amounted  to  $208.53;  the  sec- 
ond, sent  directly  to  the  plaintiff,  was  for  the  defendant's  store  in 
Washington,  Pa.,  and  amounted  to  $123.83.  These  orders  were  in 
writing,  and  were  signed  by  the  defendant.  They  specified,  not  only 
the  particular  kind  and  quality  of  the  articles  ordered,  but  contained 
also  a  schedule  of  the  prices  to  be  paid  therefor.  The  goods  were 
to  be  shipped  in  May,  and  were  to  be  paid  for  on  the  10th  day  of 
July  thereafter.  Upon  receipt  of  these  orders  the  plaintiff  transmit- 
ted by  letter  a  formal  acceptance  of  them.  A  contract  was  thus  cre- 
ated, the  obligation  of  which  attached  to  both  parties,  and  which 
neither  of  them,  without  the  agreement  or  assent  of  the  other,  could 
rescind.  On  the  5th  day  of  April,  1888,  the  defendant,  by  letter,  in- 
formed the  plaintiff  that  he  did  not  want  the  goods,  and  notified  the 
plaintiff  not  to  ship  them,  as  he  could  do  better  with  another  company. 
The  plaintiffs  replied  that  they  had  accepted  the  orders,  and  had  placed 
them  in  good  faith,  and  that  the  goods  would  be  shipped  in  due  time, 
according  to  the  agreement.  The  goods  were  shipped  within  the  time 
agreed  upon, — the  first  lot  to  Newcastle,  and  the  second  lot  to  Wash- 
ington, according  to  contract ;  but  on  the  arrival  the  defendant  declined 
to  receive  them.  The  carrier  notified  the  shipper  that,  owing  to  the 
dangerous  and  explosive  quality  of  the  goods,  they  would  not  retain 
them  in  their  possession.  The  plaintiff  thereupon  received  them  back 
from  the  carriers,  and  placed  them  on  storage,  subject  to  the  defend- 
ant's order. 

The  plaintiff  alleges  that  it  is  a  manufacturer  and  importer  of  such 
fireworks  as  are  used  in  the  4th  of  July  celebrations  throughout  the 
country ;  that  it  is  not  profitable  to  carry  these  goods  over  from  one 
season  to  another,  and  that  therefore  the  quantity  manufactured  and 

i  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §§  112-114. 


EEMEDIES  OF  TIIE  SELLER — DAMAGES  FOR  NONACCEPTANCB  265 

imported  depends  upon  the  extent  of  the  orders  received;  that  the 
defendant's  orders  entered  into  its  estimates  of  goods  to  be  made  up 
and  imported  for  the  season  of  1888,  and  that  the  goods  ordered  by 
the  defendant  were  actually  made  up  before  the  order  was  counter- 
manded. The  defendant  testifies,  however,  that  Air.  Morrison,  the 
plaintiff's  agent,  informed  him,  at  the  time  he  gave  the  first  order, 
that  the  plaintiff  had  some,  at  least,  of  the  articles  in  stock,  and  that 
he  did  not  order  any,  either  to  be  manufactured  or  imported  on  his 
account ;  that  the  transaction  was  simply  a  bargain  and  sale  of  goods, 
and  not  an  order  for  goods  to  be  manufactured  or  imported ;  and 
the  evidence  does  not  seem  to  conflict  with  this  view  of  the  case.  It 
is  plain  that  the  notice  given  to  the  plaintiff  by  the  defendant  noi 
ship  the  goods  was  a  repudiation  of  the  contract.  It  was  not  a  re- 
scission, for  it  was  not  in  the  power  of  any  one  of  the  parties  to  re- 
scind ;  but  it  was  a  refusal  to  receive  the  goods,  not  only  in  advance 
of  the  delivery,  but  before  they  were  separated  from  the  bulk,  and 
set  apart  to  the  defendant.  The  direction  not  to  ship  was  a  revoca- 
tion of  the  carrier's  agency  to  receive,  and  the  plaintiff  thereby  had 
notice  of  the  revocation.  The  delivery  of  the  goods  to  the  carrier. 
therefore,  was  unauthorized,  and  the  carrier's  receipt  would  not  chai 
the  defendant.  The  plaintiff  itself  made  the  carrier  its  agent  for  de- 
livery, but  the  goods  were  in  fact  not  delivered.  A  delivery  was  ten- 
dered by  the  carrier,  when  the  goods  arrived  at  their  destination,  but 
they  were  not  received.  The  action,  therefore,  could  not  be  for  the 
price,  but  for  special  damages  for  a  refusal  to  receive  the  goods  when 
the  delivery  was  tendered. 

We  think  the  statement  was  sufficient  to  justify  a  recovery  of  such 
damages,  as  the  words  of  the  statement  were  clearly  to  this  effect  ; 
hut  there  was  no  evidence  given  of  the  market  value  of  the  gi 
as  compared  with  the  price.     It  does  not  appear  that  the  plaintiff 
suffered  any  damage.     For  anything  that  was  shown,  the  goods  v 
worth  the  price  agreed  upon  in  the  open  market.    While  the  manii 
tendency  of  the  cases  in  the  American  courts  now  is  to  the  doctrine 
that  when  the  vendor  stands  in  the  position  of  a  complete  perform- 
ance on  his  part  he  is  entitled  to  recover  the  contracl   price  as  his 

i-ure  of  damages,  in  the  ease  of  an  executed  contracl  for  the 
cf  goods  i:  cific  the  rule  undoubtedly  is  that  the  mi  if  dam 

s  for  a  refusal  to  receive  the  goods  is  the  difference  between  the 
price  agreed  upon  and  the  market  value  on  the  day  appointed  for 
delivery.    Judgment  affirmed. 


206  ACTIONS    FOR    BKEACL1    OF    CONTRACT 


II.  Remedies  of  the  Buyer — Damages  for  Nondelivery  2 


BLUMENTHAL  v.  STAHLE. 
(Supreme  Court  of  Iowa,  1S96.    98  Iowa,  722,  G8  N.  W.  447.) 

Action  at  law  to  recover  a  balance  alleged  to  be  due  for  goods  and 
merchandise  sold  by  the  plaintiffs  to  the  defendants.  The  defend- 
ants answered  the  petition,  and  by  way  of  counterclaim  demanded 
judgment  against  the  plaintiffs  for  failure  to  perform  a  contract  pre- 
viously made  for  the  sale  of  certain  laces.  There  was  a  trial  by  jury, 
and  a  verdict  and  judgment  for  the  defendants.     Plaintiffs  appeal. 

Rothrock,  C.  J.3  The  plaintiffs  are  importers  of  laces  and  other 
fancy  goods,  and  their  place  of  business  is  in  the  city  of  New  York. 
The  defendants  are  jobbers  in  millinery  goods,  having  their  place 
of  business  in  the  city  of  Burlington,  in  this  state.  The  plaintiffs  car- 
ried on  their  business  by  sending  their  traveling  salesmen  out  in  search 
of  orders  for  goods  from  jobbers.  One  of  these  salesmen  appeared 
at  the  defendants'  store  in  Burlington  in  September,  1892,  and  so- 
licited an  order  for  goods.  After  some  negotiations,  the  defendants 
gave  the  salesman  an  order  for  about  $800  worth  of  laces,  which  the 
plaintiffs  undertook  to  import  from  some  other  country,  and  deliver 
to  the  defendants  from  the  1st  to  the  15th  day  of  January,  1893.  The 
goods  were  not  imported  and  delivered  by  that  time.  The  order  was 
mislaid  by  the  plaintiffs  or  their  salesmen,  and  when  the  time  for 
delivery  had  about  expired  the  defendants  wrote  letters  of  inquiry, 
and  the  letters  were  answered,  and  there  was  then  no  time  to  import 
the  goods  so  as  to  fill  the  order  within  the  time  agreed  upon.  The 
defendants  then  purchased  laces  from  other  dealers,  and  later  on 
they  made  a  purchase  of  the  plaintiffs  of  about  $500  worth  of  laces, 
as  we  understand  it,  upon  a  new  order.  When  this  order  was  filled, 
the  defendants  remitted  $300,  and  refused  to  pay  the  balance,  and 
made  a  claim  for  damages  for  the  failure  of  the  plaintiffs  to  perform 
the  contract  made  for  the  laces  to  be  imported.  The  defendants  car- 
ried on  their  business  by  sending  out  traveling  salesmen  to  take  orders 
for  goods,  and  they  told  the  salesman  of  the  plaintiffs  that  they  wanted 
to  send  out  traveling  men  about  the  15th  day  of  January,  and  there 
is  evidence  in  the  case  that  the  time  named  was  about  the  proper  time 
to  put  traveling  men  on  the  road  to  take  orders  for  the  next  spring 
trade. 

One  item  of  damages  claimed  by  the  defendants  was  that,  by  rea- 
son of  the  failure  of  plaintiffs  to  perform  their  contract,  the  defend- 

2  For  discussion  of  principles,  see  Tiffany,  Sales  (2d  Ed.)  §  115. 
s  Part  of  the  opinion  is  omitted. 


REMEDIES   OF   THE   BUYER — DAMAGES    FOR    NONDELIVERY         267 

ants'  salesmen  were  idle  for  about  two  weeks  before  a  supply  of  goods 
could  be  obtained  by  defendants  from  other  dealers.     It  is  said  that 
this  demand  for  damages  is  too  remote ;  that  to  permit  a  recovery  for 
the  delay  was  a  violation  of  the  well-known  rule  of  law  that  dam: 
for  the  breach  of  a  contract  are  limited  to  such  as  may  fairly  be  sup- 
posed  to   have  entered  into   the  contemplation   of   the  parties   when 
they  made  the  contract.     This  is  a  brief   statement  of  the  doctrine. 
But  it  is,  in  substance,  the  rule,  as  has  been  many  times  announced 
in  adjudged  cases.    It  is  not  denied  that  Haynes,  the  traveling  sa 
man  of  the  plaintiffs,  was  advised  of  the  time  when  the  defendants 
desired  to  put  their  salesmen  on  the  road.     Surely,  it  was  not  nei 
sary,  to  recover  damages,  that  defendants  should  show  that  the)   told 
Haynes  that,  if  they  sent  their  salesmen  out  later,  or  had  to  wait 
for  that  time  for  the  laces,  their  salesmen  would  be  idle,  and  that 
other  jobbers  would  be  in  advance  of  them  in  securing  the  spring  trade. 
In  determining  the  question  of  damages  in  such  a  case,  the  seller  ought 
to  be  held  to  have  in  contemplation  the  ordinary  and  usual  aieth 
of  the  business  of  the  purchasers,  or  of  the  trade  with  which  he  trans- 
acts business.     *     *     * 

It  is  contended  that  by  the  subsequent  order  made  by  the  defend- 
ants they  waived  any  claim  for  damages  for  failure  to  fill  the  order 
for  goods  to  be  imported,  and  that  the  second  order  estops  them  fr 
claiming  damages  for  failure  to  perform  the  first  contract.  It  is  tun- 
that  when  these  goods  were  contracted  for  and  delivered  nothing  was 
said  or  written  about  damages  for  failure  to  comply  with  the  import- 
ing order.  The  defendants  were  silent  on  that  subject.  But  they 
made  no  release  of  any  claim  they  had  for  damages.  *  *  *  Af- 
firmed. 


JOHNSTON  v.  FAXON. 
(Supreme  Judicial  Court  of  Massachusetts,  1899.    L72  Mass.  166,  52  N.  E 

Action  by  William  C.  Johnston  against  Edwin   Faxon  and  others. 
Verdict  was  directed   for  plaintiff  for  one  dollar  dan  nd  he 

brings  exceptions. 

II  .  J.     This  is  an  action  for  breach  of  a  contract  to  build 

for  the  plaintiff,  a  retail  dealer,  300  bicj  i  a  certain  kind,  "to 

delivered  as  said  Johnston  may  direct,  from  January  1,  1895,  to  J 
1,  1895."    The  defendants  broke  the  contract,  and  the  plaint 
obliged  to  can.  el  mosl  of  the  orders  which  In-  had  received,  amounti 
in  all  to  more  than  300.    The  plaintiff  was  to  pay  the  defendai  I 
a  bicycle.    The  retail  pi  ed  by  subsequenl  menl  betw< 

the  plaintiff  and  defendants,  v.  0.    This,  or  near  it,  was  the  pi 

on  the  orders.    The  auditor,  and  the  judge  ol  th<     uperioi  court  after 
him,  ruled  that  the  plaintiff  could  recover  only  nominal  damages,  al 


-08  ACTIONS    FOR    BREACH    OF    CONTRACT 

though,  if  the  loss  of  the  orders  would  not  be  too  remote,  his  damage 
was  found  to  be  upwards  of  $14,000.    The  plaintiff  excepted. 

This  court  has  gone  a  good  way  in  refusing  to  allow  profits  to  be 
recovered  for  on  the  ground  that  they  were  too  remote.  Todd  v. 
Keene,  167  Mass.  157,  45  N.  E.  81 ;  Noble  v.  Hand,  163  Mass.  289, 
39  N.  E.  1020.  But,  of  course,  the  anticipation  of  profit,  although 
sometimes  disguised  under  the  name  of  value,  constantly  is  taken  into 
account.  If  we  say  that  the  rule  of  damages  in  a  case  like  this  is  the 
(Inference  between  the  contract  price  and  the  value  of  the  machines 
if  furnished,  the  question  arises  whether,  supposing  the  plaintiff  to 
have  been  unable  to  get  the  machines  elsewhere  in  time  for  the  season, 
which  was  over  before  July  1st,  the  value  should  not  be  determined  by 
the  orders  and  the  agreement  with  the  defendants,  which  would  be  al- 
lowing for  the  anticipation  of  profit  under  another  name.  Griffin  v. 
Colver,  16  N.  Y.  489,  491,  69  Am.  Dec.  718.  The  contract  expressly 
contemplated  that  the  plaintiff  was  buying  in  order  to  sell  again.  The 
defendants  knew  that  was  the  object  of  the  agreement.  Especially  in 
view  of  the  part  they  took  in  fixing  the  retail  price,  they  must  be  taken 
to  have  expected  that  the  wheels  would  be  sold  at  an  advance.  The 
article  was  not  one  to  be  purchased  generally  in  the  market,  and  there- 
fore they  knew  that  the  plaintiff's  chance  to  make  the  difference  be- 
tween their  price  and  his  would  depend  upon  their  doing  what  they 
undertook. 

It  is  true  that  the  agreement  as  to  the  retail  price  was  made  in  Jan- 
uary, 1895,  and  that  the  orders  came  in  from  December,  1894,  to 
June,  1895,  while  the  contract  was  made  in  November,  1894.  But 
we  presume  that  the  defendants  would  not  care  to  argue  that  there 
was  any  unexpected  rise  in  retail  market  values  between  November 
and  January.  Moreover,  if  the  liability  were  made  out  in  other  re- 
spects, it  might  be  held  that  the  defendants,  by  their  contract,  adopted 
whatever  might  turn  out  to  be  the  retail  price  at  the  time  and  place 
of  delivery.  Shaw  v.  Nudd,  8  Pick.  9 ;  Ouarles  v.  George,  23  Pick. 
400;  Harvey  v.  Railroad  Co.,  124  Mass.  421,  425,  26  Am.  Rep.  673; 
Sedg.  Dam.  (8th  Ed.)  §§  737,  738. 

The  only  difficulty  in  the  way  of  the  proposed  measure  of  damages 
which  impresses  us  is  that,  when  the  defendants  made  their  contract, 
it  was  not  certain,  in  a  commercial  sense,  that  the  plaintiff  could  sell 
what  he  ordered.  His  bicycle  seems  to  have  been  more  or  less  of  an 
experiment.  But  as  remoteness — that  is  to  say,  whether,  under  given 
circumstances,  upon  an  ascertained  contract,  certain  damages  are  within 
the  scope  of  the  risk  undertaken — is  always  a  question  of  law  (Hobbs 
v.  Railway,  L.  R.  10  Q.  B.  Ill,  122;  Hammond  v.  Bussey,  20  O.  B. 
Div.  79,  89),  and  as  the  auditor  found  the  amount  of  the  plaintiff's 
damages,  if  they  were  not  too  remote,  we  are  compelled  to  say  that,  as 
between  the  plaintiff's  claim  and  nominal  damages,  the  former  comes 
nearer  to  doing  justice  than  the  latter,  in  view  of  the  considerations 
which  we  have  mentioned.    The  defendants,  by  their  contract,  took  the 


BREACH    OF    WARRANTY RIGHTS    AFTER    ACCEPTANCE  269 

risk  of  damages  to  that  extent,  if  it  should  turn  out  that  the  plaintiff 
could  sell  as  it  was  contemplated  and  expected  that  he  would.     Sedg. 
Dam.  (8th  Ed.)  §§  197,  198;   Hammond  v.  Bussev,  20  Q.  B.  Div. 
86,  94,  100. 

It  will  be  understood  that  the  contracts  made  by  the  plaintiff  are  not 
recovered  for  as  such.  But  the  orders,  covering  as  they  did  more  than 
the  number  of  bicycles  to  be  built  by  the  defendants,  coupled  with  the 
above-mentioned  agreement  as  to  the  retail  price,  are  evidence  of  the 
value  of  the  wheels.    France  v.  Gaudet,  L.  R.  6  6.  B.  l1'".  204. 

If,  as  we  understand,  the  orders  were  contracts,  conditional  only 
upon  being  performed  in  time,  it  does  not  matter  whether  they  were 
good  or  bad  under  the  statute  of  frauds.  They  are  equally  instructive 
as  to  value  either  way,  if  they  were  mercantile  agreements  intended  to 
be  carried  out. 

Exceptions  sustained. 


III.  Breach  of  Warranty — Rights  after  Acceptance  * 

I.  In  Gf.xf.rai, 


EYERS  v.  HADDEM. 

(Circuit  Court  of  United  States,  W.  D.  Wisconsin,  180.".    70  Fed.  8 

Bunn,  District  Judge.0  This  is  an  action  brought  by  the  plain- 
tiffs, who  are  citizens  of  North  Dakota,  against  the  defendants,  who 
are  citizens  of  Wisconsin,  upon  a  warrant}-  in  the  sale  of  a  stallion. 
The  defendants  are  importers  of  blooded  horses  at  Janesville,  Wis., 
and  on  March  11,  1893,  sold  to  the  defendants  an  imported  stallion, 
a  bill  of  sale  containing  the  following  printed  warranty:  "We 
herel         uaranty    the   above-named   horse   to   be   a  le    foal 

with  proper  care  and  handling.     In  ca  should  prove  nol 

to  be  so,  we  agree  to  replace  him  with  another  1  ime  br< 

and  price,  upon  delivery  to  us  of  the  above-named  horse  at  our 

-    without   COSt    to   us,   if   as  sound   and   in   as  good  condition  as 
when  purchased  of  U 

The  case  was  tried  I  a  jury  at   I  .a  Cro  >e  in  September,  1 

and  a  verdict   rendered  in  favor  of  the  plaintifl  The 

price  paid  for  the  stall  2.7oo.     The  plainti 

directed  to  show  that  the  horse,  instead  of  bein  nable  i 

is  known  among  horsemen  as  a   "ridgeling,"  and 
nearly  worthli  a  foal  getter.     The  plaintiffs'  evid<  <nt   to 

Bhow  that  during  thi  "ii  of  when  the  plainti        tood  him 

«  i  or  d  ■!!  of  pi  i  Lffany,  Bale    (2d  i  L19  i-i. 

*  Part  >'i  the  opinion  ta  omitted. 


270  ACTIONS    FOR    BREACH    OF    CONTRACT 

for  service,  he  got  only  about  10  per  cent,  of  mares  served  with  foal, 
and  that  his  value  was  not  more  than  that  of  a  common  workhorse, 
or  about  $150.  After  the  evidence  was  in  the  defendants  asked  the 
court  to  direct  a  verdict  in  their  favor,  on  the  ground  that  the  evi- 
dence showed  that  plaintiffs  did  not  return  the  horse  according  to 
the  conditions  of  the  warranty,  and  give  the  defendants  the  opportu- 
nity to  replace  him  with  another  horse.  The  court  overruled  the  mo- 
tion pro  forma,  reserving  the  question  for  further  argument  upon  a 
motion  for  a  new  trial,  in  case  there  should  be  a  verdict  in  favor  of 
the  plaintiffs.  That  motion  has  now  been  heard,  and  fully  argued 
and  considered,  and  the  court  is  of  opinion  that  it  must  be  overruled. 
The  rule  is  laid  down  in  28  Am.  &  Eng.  Enc.  Law,  827,  as  follows : 
"In  a  sale  of  certain  classes  of  articles,  the  contract  of  sale  frequently 
specifies  the  buyer's  remedy  in  case  the  warranty  is  not  complied  with. 
The  buyer  is  not  concluded  by  such  a  provision,  however,  but  may 
waive  the  special  remedy,  and  proceed  as  if  the  contract  had  been 
silent  in  that  particular.  The  special  remedy  usually  allowed  in  such 
contracts  is  the  privilege  of  returning  the  article,  if  it  proves  not  to  be 
as  warranted,  and  to  receive  back  the  price  paid." 

And  it  seems  to  be  fully  supported  by  the  authorities.  One  of 
the  leading  and  best-considered  cases  on  the  subject  is  that  of  Manu- 
facturing Co.  v.  Gardner,  10  Cush.  (Mass.)  88.  In  that  case  the  court, 
by  Metcalf,  J.,  says:  "When  a  seller,  in  addition  to  a  warranty  of 
property,  makes  a  promise  to  take  it  back  if  it  does  not  conform  to 
the  warranty,  we  cannot  hold  that  such  superadded  provision  rescinds 
and  vacates  the  contract  of  warranty.  We  are  of  opinion  that  in  such 
case  the  buyer  has,  if  not  a  double  remedy,  at  least  a  choice  of  rem- 
edies, and  may  either  return  the  property  within  a  reasonable  time, 
or  keep  it  and  maintain  an  action  for  breach  of  the  warranty." 

The  same  ruling  was  made  by  the  supreme  court  of  Connecticut  in 
an  opinion  by  Park,  C.  J.,  in  Shupe  v.  Collender,  56  Conn.  489,  15 
Atl.  405,  1  L.  R.  A.  339.  In  Perrine  v.  Serrell,  30  N.  J.  Law,  454, 
the  action  was  on  a  warranty  in  the  sale  of  a  horse,  with  a  provision 
that  if  the  horse  did  not  suit  he  might  be  returned,  and  the  seller  would 
take  him  back  and  send  one  that  would  suit.  The  court  held  that  this 
latter  provision  was  independent  of  the  warranty,  and  that  the  pur- 
chaser was  not  obliged  to  return  the  horse,  but  could  maintain  his  ac- 
tion upon  the  warranty.  In  Love  v.  Ross,  recently  decided  (October, 
1893)  by  the  supreme  court  of  Iowa,  reported  in  89  Iowa,  400,  56 
X.  W.  529,  the  contract  was  for  the  sale  of  a  stallion,  with  a  war- 
ranty that  he  was  a  reasonably  sure  foal  getter  under  favorable  cir- 
cumstances, and  in  default  of  which  the  purchasers  conld  return  the 
stallion  to  the  sellers  in  as  good  condition  as  he  was  then  in,  and  the 
sellers  would  exchange  him  for  another,  giving  or  receiving  the  actual 
difference  of  value  in  the  two  animals.  In  my  judgment  the  case  is 
not  distinguishable  from  the  one  at  bar.  It  was  held  that  the  pur- 
chasers had  he  right  to  retain  the  horse  and  to  recover  damages  for 


BREACH    OF   WARRANTY — RIGHTS    AFTER    ACCEPTANCE  -71 

the  breach  of  the  warranty,  or  to  return  him  and  receive  another  horse 
in  exchange  upon  the  terms  stated.     Hefner  v.  Haynes,  by  the  same 
court,  decided  in  1894,  reported  in  89  Iowa,  616,  57  X.  W.  421,  holds- 
to  the  same  rule  under  a  similar  warranty  in  the  sale  of  a  stallion. 
The  supreme  court  of  Minnesota,  in  Mandel  v.  Buttles,  21  Mini 
and  Fitzpatrick  v.  D.  M.  Osborne  &  Co.,  50  Minn.  261,  52  X.  W.  861, 
has  held  the  same  doctrine,   following  Manufacturing  Co.  v.   Gard- 
ner, supra.     *     *     *     The  supreme  court  of  Wisconsin  has  affirn 
the  same  doctrine  in  Osborne  v.  McQueen,  67  Wis.  3'22.  2  '  N.  \Y.  I 
and  in  Park  v.  Richardson  &  BoyiTton  Co.,  81  Wis.  399,  51   X.  W. 
?72.     *     *     * 

In  the  proper  construction  of  the  warranty  in  the  case  at  bar,  there 
are  one  or  two  other  considerations  which  I  think  should  have  some 
weight.  The  warranty  is  in  print,  being  part  and  parcel  of  a  printed 
blank  for  the  sale  of  horses  by  the  defendants,  furnished  and  in  com- 
mon use  by  them.  The  guaranty  is  absolute  and  complete  in  itself, 
closing  with  a  full  stop.  The  provision  for  a  return  of  the  hot 
which  is  superadded,  does  not  in  terms  make  it  obligatory  upon  the 
purchasers  to  return  him.  It  only  says  that  upon  his  delivery  to  the 
sellers  without  cost,  if  as  sound  and  in  as  good  condition  as  when 
purchased,  the  sellers  will  replace  him  with  another  horse.  It  is  only 
by  construction  that  any  obligation  can  lie  put  upon  the  purchas 
to  return  the  horse.  It  would  have  been  very  easy  by  the  change  of 
a  few  words,  to  have  placed  the  obligation  upon  the  purchasers,  in 
ress  terms,  that  is  now  sought  to  be  put  upon  them  by  construc- 
tion. Under  these  circumstances,  it  would  seem  proper  to  apply  the 
rule  that  is  sometimes  applied,  that,  when  there  is  doubt  abi 
proper  construction,  to  construe  the  contract  most  strongly  ! 

son  furnishing  the  printed  blank  containing  the  provision  in  qu 

in. 

It  is  evident  that,  if  the  construction  contended  for  by  thi 

be  the  true  one,  the  remedy  under  the  warranty,  in  the  circum- 
3  of  this  OUnt  to  but  very  little.     Under  I 

usl  be  as  and  in  as  ondition  when 

returned  as  at  the  time  of  th        I      i  thai  t: 

dd  ret'n  e  i"  i  him  hack  it"  he  lacked  in  any  d< 

[n  .  n  sold.     'I  in   Marc!; 

could  not  be  tested  until  late  in 
It'  in  the  meantime  a  i 
|  come  Hi  or  he  should  ha 

ommon  to  horses,  withoul  any  faull  on  the  plait 

and  perh; 

though  t) 
.,  to  or  upon  his  value  for  the  pur|  ich  he 

I,  in  which  case  the  purcha  ers  would  have  no  om  the 

warranty. 


1*72  ACTIONS    FOR    BREACH    OF    CONTRACT 

There  is  a  provision  in  writing  filled  into  the  blank  which  shows 
quite  clearly  that  the  vendors  intended  to  have  it  in  their  power  to 
take  advantage  of  any  slight  defect  or  ailment  whatsoever  in  the  horse 
arising  after  the  sale,  though  it  should  have  no  relation  to  his  qual- 
ities as  a  foal  getter.  That  provision  is  this,  that :  "In  case  this  horse 
is  returned  on  account  of  not  being  a  reasonable  foal  getter,  a  lump 
on  inside  right  fore  leg,  and  below  the  knee,  shall  not  be  considered 
a  blemish  and  reason  for  not  taking  him  back,  as  a  small  injury  ap- 
pears there  now." 

If  he  did  not  prove  to  be  a  good  foal  getter,  which  could  not  be 
tested  until  one  season  had  elapsed,  and  could  not  be  returned  on  ac- 
count of  some  small  blemish  not  affecting  materially  his  value,  which 
rendered  him  in  not  so  good  a  condition  as  at  the  time  of  the  sale,  the 
warranty  would  be  of  no  appreciable  value,  if  there  were  no  remedy 
for  a  breach  except  to  return  the  horse.  Such  a  result,  considering 
the  language  used,  could  hardly  have  been  in  the  contemplation  of 
the  parties.    The  motion  for  a  new  trial  is  denied. 


2.  Rescission 


CANHAM  v.  PLANO  MFG.  CO. 

(Supreme  Court  of  North  Dakota,  1S93.    3  N.  D.  229,  55  N.  W.  5S3.) 

Action  for  breach  of  contract  by  John  Canham  against  the  Piano 
Manufacturing  Company.  Plaintiff  had  judgment,  and  defendant  ap- 
peals. 

Corliss,  J.6  The  defendant  sold  and  delivered  to  plaintiff  a  twine 
binder.  For  this,  plaintiff  gave  his  three  promissory  notes.  He  sub- 
sequently returned  the  machine,  claiming  that  there  was  a  breach  of 
the  warranty  accompanying  the  sale,  and,  having  paid  two  of  these 
notes,  he  brings  suit  to  recover  the  amount  so  paid,  and  also  the  amount 
due  on  the  other  note.  If  there  was  a  valid  warranty  on  such  sale, 
and  a  breach  thereof,  and  a  valid  rescission  of  the  contract,  then 
the  consideration  for  these  notes  failed,  and  it  was  the  duty  of  the 
defendant  to  return  the  note  which  remained  unpaid,  and  to  restore 
the  money  which  had  been  paid  by  the  plaintiff  in  satisfaction  of  the 
other  two  notes.  One  of  the  notes  was  paid  to  the  agent  on  his  prom- 
ise to  remedy  defects  in  the  machine,  and  the  other  one  was  paid  by 
plaintiff  to  one  claiming  to  be  an  innocent  purchaser  for  value.  In 
making  these  payments,  plaintiff  did  not  waive  his  right  to  a  return 
of  the  money  on  failure  of  the  consideration  of  these  notes.  The  other 
note  having  been  negotiated  before  maturity  by  the  defendant,  it  is 

e  Part  of  the  opinion  is  omitted. 


BREACH    OF   WARRANTY — RIGHTS   AFTER   ACCEPTANCE  273 

liable  to  plaintiff  for  the  amount  due  thereon  if  a  failure  of  consider- 
ation is  established.  Fahey  v.  Harvesting  Co.,  3  N.  D.  221  \  55  X.  W. 
580,  44  Am.  St.  Rep.  554  (decided  at  this  term,)  and  cases  there  cited. 

The  sufficiency  of  the  complaint  was  challenged,  but  it  is  clearly 
sufficient.  It  shows  a  breach  of  warranty  and  rescission  of  the  con- 
tract which  would  entitle  plaintiff  to  recover  the  amounts  paid  on  the 
two  notes  and  the  amount  due  on  the  note  negotiated  by  defendant 
before  maturity.  All  these  facts  relating  to  these  notes  are  fully 
forth  in  the  complaint.  It  therefore  states  a  cause  of  action.  The 
court  directed  a  verdict  for  the  plaintiff  for  the  full  amount  claimed. 
From  the  judgment  entered  upon  this  verdict,  defendant  appeals. 
Was  it  error  to  direct  this  verdict?  The  machine  was  sold  by  an  agent 
of  the  defendant  whose  name  was  Crafts.  The  warranty  was  oral. 
It  was,  in  substance,  that  the  binder  would  do  as  good  work  as  any 
other  binder  in  the  market.  There  is  no  controversy  either  as  to  the 
fact  of  this  warranty,  or  as  to  the  fact  of  a  breach  thereof. 

But  it  is  insisted  that  the  plaintiff  did  not  rescind  the  contract 
promptly,  after  discovering  the  defect.  This  would  be  fatal  to  plain- 
tiff's recovery  unless  he  was  induced  to  delay  action  by  defendant's 
promise  to  make  the  machine  work.  Section  3591,  Comp.  Laws.  The 
sale  was  in  July,  1SS9,  and  the  binder  was  not  in  fact  returned  until 
August  4,  1890.  It  is  undisputed,  however,  that  the  agent  Crafts  re- 
peatedly promised  to  put  the  binder  in  working  order,  and  requested 
the  plaintiff  to  keep  it,  to  enable  him  (Crafts)  to  do  this.  A  number 
of  efforts  to  fix  it  were  made  during  the  season  of  1889,  hut  they  all 
proved  abortive.  Each  time  the  attempt  failed,  plaintiff  expressed  his 
determination  to  return  the  binder,  hut  was  deterred  from  doing  so 
by  Crafts'  repeated  promises  to  make  the  binder  do  good  work,  and 
his  often-repeated  entreaties  that  the  plaintiff  keep  the  machine,  to 
give  him  (Crafts)  a  chance  to  make  it  fulfill  the  warranty.  Finally, 
not  being  able  to  make  it  work  during  the  harvest  of  1889,  Crafts 
promised  plaintiff  that,  if  he,  plaintiff,  would  keep  the  binder  until 
next  season,  he  would  agree  to  see  that  it  was  put  in  good  working 
order  for  next  harvest,  to  do  as  good  work  as  any  other  machine  in 
the  market.     Relj  .  plaintiff  did  keep  the  bind 

It  was  urged  on  the  argument  that  Crafts  gave  his  mere  personal 
guaranty  that  this  should  be  done,  hut  we  do  not  so  con  true  the  i 
ord.    It  was  undoubtedly  understood  by  both  the  parties  that  he 

ing  for  the  defendanl  in  making  this  promise.     During  all  of  this 
time  Crafts  v  n\  for  the  defi  in  the  -air  of  the  e  machines. 

He  was  their  general  ag<  nl  for  this  purpose,  being  intrusted  with  this 
busines !  of    •  llii  g  g<  nerally,  and  not  merely  with  thi  ■  I  thi    par 

ticular  machine.     "An  agenl   for  a  particular  tran  action  is  called  a 
-nt.    All  othi  neral  a  "    Section  mp. 

l.av.  such  agent  he  had  authority  to  make  the  warranty  on  the 

!  to.     Section  Id.;   M<  Cormi<  k  v.  I..  : 


-74  ACTIONS    FOR    BREACH    OF    CONTRACT 

Minn.  135,  9  N.  W.  675.  It  cannot  be  doubted  that  he  had  power  to 
represent  and  bind  the  defendant  by  his  subsequent  conduct  and  prom- 
ises, inducing-  plaintiff  to  refrain  from  prompt  action  on  discovery  of 
the  defects  in  the  machine.  Snody  v.  Shier,  88  Mich.  304,  50  N.  W. 
252  ;   Pitsinowsky  v.  Beardsley,  37  Iowa,  9. 

Defendant,  through  its  authorized  agent,  by  its  promises  and  con- 
duct, lulled  the  plaintiff  into  a  sense  of  security  against  prejudice  from 
his  failure  promptly  to  restore  the  property,  and  cannot  be  heard  to 
insist  that  the  delay  until  the  year  1890  is  fatal  to  plaintiff's  right  to 
rescind  for  breach  of  warranty.  Snody  v.  Shier,  88  Mich.  304,  50 
N.  W.  252 ;  Manufacturing  Co.  v.  Kelly,  -26  111.  App.  394.  In  fact, 
there  was  a  new  warranty  made  in  the  fall  of  1889  that  the  machine 
would  do  as  good  work  the  next  season  as  any  other  binder  in  the 
market.  In  the  month  of  August,  1890,  after  repeated  efforts  by 
plaintiff  to  induce  Crafts  to  send  an  expert  to  fix  the  binder  in  ac- 
cordance with  his  promise,  one  was  finally  sent  out  to  plaintiff's  farm. 
It  was  Saturday  night  before  the  work  was  finished.  Early  Monday 
morning  plaintiff  started  the  machine.  It  did  not  do  good  work.  The 
same  day  it  was  returned  by  plaintiff  to  the  same  place  from  which 
he  took  it  when  he  purchased  it,  and  he  then  notified  the  agent  Crafts 
that  he  had  returned  it,  and  demanded  a  return  of  his  notes.  If  Crafts 
was  agent  for  the  defendant  during  the  year  1890  in  the  sale  of  its 
machines,  there  can  be  no  doubt  that  plaintiff  acted  promptly  in  re- 
turning the  property  to  defendant,  in  view  of  the  promises  and  con- 
duct of  defendant's  agent  inducing  delay,  and  therefore  amounting 
to  a  waiver  of  return  until  after  defendant's  final  effort  to  fix  the 
machine.  That  Crafts  could  give  a  new  warranty,  after  failure  to 
make  the  binder  work  during  the  harvest  of  1889,  cannot  be  doubted. 
There  being  a  breach  of  a  former  warranty,  plaintiff  had  it  in  his 
power  to  return  the  binder,  and  have  back  his  notes,  or  a  new  machine 
in  place  of  the  defective  one.  This  new  machine  would  be  delivered 
upon  the  same  warranty  which  related  to  the  old  one.  The  parties 
could  agree,  after  the  return  of  the  old  one,  to  a  new  contract  of  sale 
of  the  old  binder  with  warranty,  and  therefore  the  agent  could  make 
a  new  warranty  without  the  formality  of  a  return,  which  he  could 
not  prevent. 

This  same  reasoning  leads  to  the  conclusion  that  the  agent  could 
attach  to  the  continued  holding  of  the  binder  by  the  plaintiff  a  con- 
dition that  if  it  should  not  do  as  good  work  the  next  season  as  any 
other  binder  in  the  market  he  would  take  it  back.  This  is  precisely 
what  he  did  agree  to.  It  amounted,  in  effect,  to  a  keeping  of  the  ma- 
chine by  the  plaintiff  on  trial,  with  a  right  to  return  it  next  year  if  it 
should  fail  to  work  as  stipulated  by  defendant's  agent.  Had  the  bind- 
er been  returned  as  sold  Crafts  would  have  had  power  to  sell  it  on 
trial.  Deering  v.  Thorn,  29  Minn.  120,  12  N.  W.  350;  Oster  v.  Mick- 
ley,  35  Minn.  245.  28  N.  W.  710.  He  therefore  had  power  to  prom- 
ise to  take  back  the  binder  if  it  did  not  work  as  warranted,  without 


BREACH    OF   WARRANTY — BIGHTS    AFTER    ACCEPTANCE  -7  J 

tas  necessity  of  a  formal  surrender  of  the  machine  and  the  cancella- 
tion of  the  contract  of  sale  and  the  making  of  a  new  contract.  What- 
ever view  we  take  of  the  matter, — whether  we  regard  the  old  warranty 
as  undisturbed,  or  consider  that  a  new  warranty  was  made  relating  to 
the  work  the  binder  would  do  during  the  year  1890,  or  that  an  agree- 
ment was  made  to  take  back  the  binder  if  it  should  fail  to  do  good 
work  during  the  year  1890, — we  reach  the  same  conclusion.  We  h 
as  a  matter  of  law,  that  the  binder  was  returned  in  time.  *  *  * 
Affirmed.7 


3.  Breach  of  Implied  Warranty 


NORTHWESTERN  CORDAGE  CO.  v.  RICE. 

(Supreme  Court  of  North  Dakota.   L896.     5  N.  I>.  432,  67  N.    W.  298,  57  Am. 

St  Rep.  563.) 

Action  by  the  Northwestern  Corda  npany  against  D.  K.  Rice. 

From  a  judgment  for  plaintiff,  defendant  appea 

Corliss,  J.  Defendant  ordered  of  the  plaintiff  7,000  pounds  of 
pure  Manilla  twine.  Plaintiff,  acting  on  this  order,  shipped  to  defend- 
ant a  lot  of  twine,  which  the  evidence  tend-  to  prove  was  not  pure 
Manilla  twine,  but  an  inferior  article,  worth  much  less  in  the  market. 
Defendant  having  been  sued  Upon  the  notes  given  for  the  purchase 
price  of  this  twine,  he  interposed  as  a  counterclaim  an  alleged  c; 
of  action  founded  upon  breach  of  warranty.  (  >n  the  trial  the  district 
judge  directed  a  verdict  in  favor  of  the  plaintiff.     Defendant  appeals. 

At  the  outset,  we  are  required  to  determine  whether,  in  fact,  th< 
was  a  warranty.      It  is  tine  that  the  plaintiff  did  not,  in  t>  .ar- 

rant that  the  twine  sold  by  it  to  defendant  was  pine  Manilla  tu 
Indeed,  it  ma  presentations  whatever  in  written  instrument, 

or  by  oral  statement.     But,  when  it  accepted  from  defendant  an  order 

Manilla  twine,  it,  in  contemplation  of  law,  :  to  sell 

fendant  an  articl  ring  to  that  description.     That  a  s  le  ol 

article  by  a  particular  description  constitutes  a  \\  that  the 

ticl  to  that  description,  is  well  settled.     Benj.  S 

622,  and  i  ited;    I  v.  Hilt  N.  Y. 

Am  63;    Dounce  v.  64  \.  Y.   11 1  ;   W 

X.  |.  Law,  262,  13  Am.  Rep.  ^ 

2,  16  Am.  St.  I'  Y 

1 18,  17  Am.   Rep.   13;    U  Rounl 

v    !  21  1.   13    \m    Dec.  42  r  v. 

\m.   Rep 

-  Compare  Milliken  v.  Bkilllnjw,  Wl  Me    IfO,  36   \n   77  MMi  Mundt 

V.  Sinn  '•    1.   HO  N-   W    '■^-:•■    l20    Xl"     8(     ReP    '""  '''■' 


276  ACTIONS    FOR    BREACH    OF    CONTRACT 

Eng.  Enc.  Law,  p.  776 ;  Gould  v.  Stein,  149  Mass.  570,  22  N.  E.  47, 
5  L.  R.  A.  213,  14  Am.  St.  Rep.  455 ;  Love  v.  Miller,  104  N.  C.  582, 
10  S.  E.  685;  Morse  v.  Moore,  83  Me.  473,  22  Atl.  362,  13  L.  R.  A. 
224,  23  Am.  St.  Rep.  783.  Said  the  court  in  Gould  v.  Stein,  "The 
general  rule  is  familiar  and  admitted,  that  a  sale  of  goods  by  partic- 
ular description  imports  a  warranty  that  the  goods  are  of  that  de- 
scription." 

We  cannot  say,  under  the  facts  of  this  case,  that  the  defendant,  as 
a  matter  of  law,  has  waived  his  right  to  rely  upon  the  warranty.  The 
twine  delivered  was  Manilla  twine,  but  it  was  not  pure  Manilla.  It 
is  probable  that  a  special  examination  of  it  before  acceptance  would 
have  resulted  in  the  discovery  that  it  was  not  as  warranted.  But  the 
case  is  not  one  of  the  failure  of  the  vendor  to  deliver  any  article  of 
the  character  of  that  ordered.  It  was  not  the  purchase  of  twine,  fol- 
lowed by  the  delivery  of  some  other  article.  We  hold  that  under  the 
facts  of  this  case  the  defendant  cannot  be  deemed,  as  a  matter  of  law, 
to  have  waived  his  right  to  rely  upon  the  warranty.  It  is  impossible 
to  lay  down  a  rule  on  this  subject  which  can  be  readily  applied  to  the 
varied  facts  of  different  cases.  Cases  may  arise  where  it  is  apparent 
that  the  purchaser  could  not  have  relied  on  the  warranty  when  he  ac- 
cepted the  goods,  or  that  he  has  waived  his  right  to  insist  upon  such 
warranty.  But  we  think  it  would  be  an  extremely  unjust  rule  to  in- 
terpret as  an  implied  waiver  the  conduct  of  the  purchaser  in  receiving 
the  goods  which  do  not  exactly  cofrespond  to  the  warranty,  merely 
because  he  might,  by  examination,  have  discovered  the  defect.  It 
often  happens  that  the  purchaser  is  so  situated  that  it  is  necessary 
for  him  to  accept  the  article  in  its  defective  condition.  It  would  in- 
deed be  singular  that  one  who  had  placed  him  in  this  position  should 
be  allowed  to  escape  liability  on  his  contract  of  warranty.  In  many 
cases  the  inference  of  a  purpose  to  rely  upon  the  warranty  is  stronger 
than  the  inference  of  a  purpose  to  pay  the  price  of  a  good  article  for 
a  defective  one.  In  the  case  at  bar  the  jury  would  have  been  justified 
in  finding  that  defendant  could  not,  without  particular  examination, 
have  discovered  that  the  twine  was  not  pure  Manilla.  In  favor  of  one 
who  has  warranted  an  article,  the  purchaser  does  not  owe  the  duty  of 
careful  inspection.    He  may  rely  on  the  warranty. 

There  is  much  confusion  in  the  authorities.  This  is  the  consequence 
of  too  much  refinement  in  reasoning,  and  the  making  of  many  nice 
distinctions.  The  law  on  this  subject  should  be  adjusted  to  the  needs 
of  the  business  world,  and  be  made  as  simple  as  possible.  Without 
attempting  to  anticipate  the  exceptions  to  the  general  rule  which  in  the 
future  it  may  be  found  necessary  to  establish,  we  believe  it  to  be  in 
the  interests  of  justice,  and  to  fairly  express  the  sense  of  business  men 
upon  the  subject,  that  whatever  form  a  warranty  assumes,  if  there  is 
in  fact  a  warranty,  the  mere  acceptance  of  the  property  will  not,  as  a 
matter  of  law,  bar  a  recovery  for  breach  of  the  warranty,  although 
an  inspection  of  the  property  would  have  led  to  a  discovery  of  the 


BREACH    OF   WARRANTY — RIGHTS   AFTER   ACCEPTANCE  -77 

breach.  Xor  will  actual  knowledge  of  the  defective  condition  of  the 
thing  delivered  necessarily  preclude  a  reliance  upon  the  warranty. 
All  the  facts  are  to  be  laid  before  the  jury,  to  the  end  that  they  may 
determine  whether  the  purchaser  relied  on  the  warranty,  and  whether 
he  has  waived  his  right  to  take  advantage  of  its  breach.  Gould  v. 
Stein,  149  Mass.  570,  22  X.  E.  47.  5  L.  R.  A.  213.  14  Am.  St.  Rep. 
455  ;  English  v.  Commission  Co.  (C.  C.)  48  Fed.  196;  Lewis  v.  Roun- 
tree,  78  X.  C.  323;  Best  v.  Flint,  58  \'t.  5  13.  5  Atl.  192,  56  Am.  Rep. 
570;  Polhemus  v.  Heiman,  45  Cal.  573;  Coal  Co.  v.  Bradley,  2  Wash. 
600,  27  Pac.  454,  26  Am.  St.  Rep.  890;  Hege  v.  Newsom,  96  Ind.  431 ; 
English  v.  Commission  Co.,  6  C.  C.  A.  416,  57  Fed.  451  ;  2  Benj.  Sales 
(6th  Am.  Ed.)  p.  856,  note  29;  Daylor  v.  Hooglund,  39  Ohio  St.  671  : 
Hollowav  v.  Jacoby,  120  Pa.  5S3,  15  Atl.  4S7,  6  Am.  St.  Rep.  73 
Parks  v.  Tool  Co.,  54  N.  Y.  586;  Zabriskie  v.  Railroad  Co.,  131  X.  Y. 
72,  29  X.  E.  1006;  Morse  v.  Moore,  83  Me.  473,  22  Atl.  3^2.  13  1.. 
R.  A.  224,  23  Am.  St.  Rep.  783;  Canning  Co.  v.  Metzger,  118  X.  Y. 
260,  23  X.  E.  374,  16  Am.  St.  Rep.  753. 

In  Morse  v.  Moore,  83  Me.  473.  22  Atl.  362.  13  L.  R.    V  224.  2 
Am.  St.  Rep.  783, — the  best-considered  case  to  be  found  on  the  point 
in  the  books, — the  court  say:    "The  Eact  of  acceptance,  however, 
a  matter  of  evidence,  may  have  great  weight  on  the  question  of  satis- 
factory or  sufficient  performance.     In  the  first  place,  it  raises  con 
erable  presumption  that  the  article  delivered  actually  corresponded 
with  the  agreement.    In  the  next  place,  it  is  some  evidence  of  a  waiver 
of  any  defect  of  quality,  even  if  the  article  did  not  so  correspond, — 
evidence  of  more  or  less  force,  according  to  the  circumstan  the 

case.    If  the  goods  be  accepted  without  objection  at  the  lime,  or  v, 
in  a  reasonable  time  afterwards,  the  evidence  of   waiver,  unli 
plained,  might  be  considered  conclusive.     But  if.  on  the  other  hand. 
objection  is  made  at  the  time,  and  the  vendor  notified  of  the  def< 
I  the  defects  are  material,  the  inference  of  waiver  would  he  a 
gether  repelled.     But  acceptance  accompanied  by  silence'  i^  not 
sarily  a  waiver.    The  law  permits  explanation,  and  seeks  to  know  the 
nces  which  induced  acceptance.     It  might  he  that  tin-  bu 

wa«  -nt  to  act   upon   his   own  judgment,  or  had   no  i 

tunity  t<»  do  leclined  to  do  so  a-  a  mat* 

pendence  mainly,  as  he  has  a  right  to  do,  niM.n  the  warranty 

0f  tl  '    i'oii  tin  ion  th  r  the  JU 

under  tin-  direction  of  the  1 1  urt." 

In   I  h  v.  Co  v  416,  57  !'<  d.  451,  the 

.  at  pa  .  57  Fed.,  page  "Thi 

in  the  to  thi  1  urch; 

to  accept  the  I  rely  upon  tl  the  authoi 

ities  !  ",1  ,h'  ';"'M 

arrival  at  the  place  of  delivei  und,  u]  camination,  to  be 

.Mind,  the  pui  return  them  to  the  v<  n 

to  take  th<  m  back,  and  tl  i  ind  thi 


378  ACTIONS    FOR    BREACH    OF    CONTRACT 

tract,  or  he  will  be  presumed  to  have  acquiesced  in  the  quality  of  the 
goods.  But  the  great  weight  of  authority,  as  well  as  reason,  is  now, 
we  think,  well  settled,  that,  in  cases  of  this  kind  and  character,  if  the 
goods  upon  arrival  at  the  place  of  delivery  are  found  to  be  unmer- 
chantable, in  whole  or  in  part,  the  vendee  has  the  option  cither  to  re- 
ject them,  or  receive  them  and  rely  upon  the  warranty;  and,  if  there 
has  been  no  waiver  of  the  right,  he  may  bring  an  action  against  the 
vendor  to  recover  the  damages  for  a  breach  of  the  warranty,  or  set 
Up  a  counterclaim  for  such  damages  in  an  action  brought  by  the  ven- 
dor for  the  purchase  price  of  the  goods."  There  is  nothing  in  the  de- 
cisions of  this  court  conflicting  with  our  views  in  this  case. 

It  is  claimed  by  plaintiff  that  defendant,  by  renewing  the  notes  given 
by  him  for  the  purchase  price  of  the  twine,  waived  his  right  to  re- 
coup damages  for  breach  of  the  warranty.  But  it  is  evident  that,  if 
a  cause  of  action  once  existed  in  his  favor  for  damages,  the  mere  giv- 
ing of  renewal  notes  would  not,  of  itself,  extinguish  that  cause  of 
action.  Even  payment  of  the  purchase  price  would  not  have  that  ef- 
fect. Gilmore  v.  Williams,  162  Mass.  351,  38  N.  E.  976.  The  cir- 
cumstance that  a  purchaser  had  given  his  note,  or  had  paid  for  the 
property,  with  full  knowledge  of  the  facts,  would  generally  be  per- 
suasive— and  might,  unexplained,  be  conclusive — evidence  that  there 
was  in  fact  no  breach  of  warranty,  or  possibly  that  the  purchaser  had 
waived  his  right.  We  do  not,  however,  wish  to  be  understood  as 
holding  that  a  mere  waiver  by  implication,  without  consideration, 
would  necessarily  operate  to  defeat  the  claim  for  damages.  But  the 
purchaser  might  negative  the  presumption  of  waiver,  if  such  an  act 
could  create  such  a  presumption,  by  showing  that,  as  a  matter  of  fact, 
he  distinctly  asserted  his  right  to  rely  upon  his  claim  for  damages. 

In  the  case  at  bar  it  appears  that  the  new  notes  were  given  at  the 
solicitation  of  the  plaintiff's  agent,  and  on  his  promise  that  defendant 
should  be  allowed  his  damages.  We  do  not  say  that  a  cause  of  action 
can  be  predicated  on  this  arrangement.  Serious  questions  of  the  ex- 
tent of  the  agent's  authority,  and  of  the  contradiction  of  a  written 
contract  by  parol  evidence,  would  have  to  be  met,  before  we  could 
decide  the  case  on  that  theory.  But  the  evidence  was  certainly  com- 
petent to  explain  the  circumstances  surrounding  the  giving  of  the  new 
notes,  to  the  end  that  defendant  might  rebut  any  possible  inference 
from  that  fact  unfavorable  to  his  claim  for  damages.  The  trial  court 
should  have  submitted  the  question  of  breach  of  warranty  to  the  jury, 
with  proper  instructions.  For  the  error  of  the  court  in  refusing  to 
do  so,  and  in  directing  a  verdict  for  plaintiff,  the  judgment  is  reversed, 
and  a  new  trial  is  ordered.    All  concur. 


BREACH   OF    WARRANTY— RIGHTS    AFTEB    ACCEPTANCE  -  •  V 


TALBOT  PAVING  CO.  v.  GORMAN. 

(Supreme  Court  of  Michigan,  1S94.     103  Mich.  403,  01  N.  W.  055,  27  L. 

R.   A.   96.) 

Action  by  the  Talbot  Paving  Company  against  Charles  A.  Gorman. 
Judgment  for  defendant,  and  plaintiff  brings  error. 

Hooker,  J.  The  plaintiff  contracted  with  the  defendant  for  the 
delivery  f.  o.  b.,  Detroit,  of  a  quantity  of  Medina  paving  stone,  the 
same  to  answer  the  requirements  of  Detroit  specifications,  of  which 
defendant  had  a  copy.  The  contract  was  made  by  correspondence. 
At  request  of  defendant,  the  plaintiff  advanced  $2,500  upon  the  con- 
tract, and  afterwards  made  other  payments,  leaving  a  balance  of  $1,- 
338.47.  The  requisite  amount  of  stone  was  shipped  to  Detroit,  where 
it  was  unloaded,  and  used  by  the  plaintiff  upon  its  paving  jobs,  upon 
which  it  was  at  work.  It  is  claimed  upon  its  behalf  that  the  stone 
did  not  conform  to  the  specifications  rendering  it  necessary  to  put 
work  upon  them,  of  which  it  seasonably  informed  the  defendant,  with 
the  suggestion  that  he  might  send  men  to  do  such  work  if  he  chose, 
and  that  he  did  send  men  who  did  some  such  work.  This  action  was 
brought  by  the  purchaser,  who  claimed  a  balance  his  due  of  $684.49 
for  such  work  done  by  it  and  for  some  broken  stone.  The  defendant 
claimed  the  amount  of  $1,338.47.  The  defendant  recovered  $1,432. 
which  probably  included  some  interest. 

The  court  instructed  the  jury  that:  "There  can  be  no  question, 
with  reference  to  this  executory  contract,  that  the  acceptance  by  the 
Talbots  in  the  first  instance  precluded  their  recouping,  as  we  may  say, 
for  the  character  of  the  stone,  because  it  did  not  come  up  to  the  De- 
troit specifications.  In  other  words,  they  had  the  opportunity  to  ex- 
amine the  stone  as  it  was  delivered  on  the  cars  in  this  city,  and,  unless 
there  was  something  further  than  that,— unless  there  was  some  other 
promise  on  the  part  of  the  defendant,— then  the  defendant  would  be 
entitled  to  a  verdict  for  the  amount  claimed,  viz.  one  thousand  three 
hundred  and  thirty-eight  dollars  and  forty-seven  cents,  with  interest 
from  November  5^  1892."  The  court  instructed  the  jury  further  that 
if  they  should  find  that  the  defendant  came  to  Detroit,  and  agreed 
with  the  plaintiff  to  pay  for  the  work  mentioned,  there  was  a  moral 
consideration  that  would  support  the  promise,  and  the  amount  should 
be  allowed  to  the  plaintiff. 

The  principal  question  in  this  case  is  whether  the  plaintiff,  by  re- 
ceiving and  using  the  stone,  accepted  them  as  a  full  compliance  with 
the  contract,  or  whether  he  had  a  right  to  take  them,  and  recover  his 
damages  by  way  of  recoupment  or  action  -rowing  out  of  their  failure 
lal  the  specifications.  There  are  cases  which  hold  that  an  ac- 
tance  of  goods  precludes  such  recovery,  and  there  are  others  which 
hold  the  contrary.  On  principle,  the  di  tinguishing  feature  seems  to 
be  a  warranty.     If  the  sale  is  without  a  warranty,  and  affords  an  op- 


2S0  ACTIONS   FOR    BREACH    OP    CONTRACT 

portunity  for  ascertaining  whether  the  goods  conform  to  the  descrip- 
tion, the  doctrine  of  caveat  emptor  applies,  and  an  acceptance  cuts  off 
all  rights  of  recovery.  The  vendee  should  decline  to  receive  the  goods, 
and  sue  for  a  breach  of  the  contract.  If,  on  the  other  hand,  the  sale 
is  with  a  warranty,  the  vendee  may  lawfully  receive  the  goods,  and 
recover  or  recoup  damages  upon  the  warranty,  which  is  held  to  be 
a  collateral  undertaking.  It  is  believed  that  the  principle  is  generally 
recognized.  In  addition  to  cases  cited  by  counsel,  see  Pierson  v. 
Crooks,  115  N.  Y.  539,  22  N.  E.  349,  12  Am.  St.  Rep.  831. 

It  seems  to  be  in  the  present  case;  counsel  for  appellant  insisting 
that  an  implied  warranty  exists,  while,  upon  the  other  hand,  it  is  said 
that  the  provision  in  relation  to  the  specifications  is  a  condition  pre- 
cedent merely.  The  contract  was  an  executory  contract,  and  may 
fairly  be  said  to  have  contemplated  the  manufacture  of  the  curbing 
from  a  specified  stone,  in  accordance  with  specified  dimensions  and 
workmanship.  If  the  agreement  to  furnish  such  stone  of  the  specified 
dimensions  was  a  warranty  at  all,  it  is  difficult  to  understand  why  it 
was  not  an  express  warranty,  and,  if  it  was  such,  there  can  be  no  im- 
plied warranty  that  the  stone  should  conform  to  the  specifications. 
Indeed,  this  does  not  seem  to  be  claimed.  These  things  were  a  neces- 
sary part  of  the  description  of  the  commodity,  and  nothing  more,  un- 
less the  face  of  the  contract  justifies  the  conclusion  that  it  was  intended 
as  a  warranty.  Neither  party  asserts  this,  and  so  we  turn  to  the  ques- 
tion of  implied  warranty.  The  exact  point  made  by  plaintiff  appears 
to  be  that,  inasmuch  as  the  defendant  knew  what  the  specifications 
were,  the  law  implied  a  warranty  of  fitness.  A  pertinent  inquiry  is, 
"A  fitness  for  what?"  Was  it  fitness  for  the  paving  jobs  that  the 
plaintiff  had  on  hand?  If  this  be  claimed,  it  is  a  sufficient  answer  to 
say  that  the  evidence  fails  to  disclose  that  the  defendant  knew  what 
jobs  he  had.  Moreover,  if  the  law  is  to  imply  that  the  stone  was  to 
be  fit  for  the  job,  it  must  be,  because  defendant  knew  what  the  job 
actually  required,  and  had  undertaken  to  provide  that,  and  his  lia- 
bility would  be  tested  by  that.  But  this  was  not  so.  He  only  knew 
what  the  specifications  required.  They  might  be  right  or  wrong.  He 
had  no  means  of  determining,  and  it  was  not  left  to  defendant's  judg- 
ment to  make  suitable  stone  for  the  jobs.  He  had  simply  undertaken 
to  deliver  certain  stone  of  given  dimensions.  If  he  should  deliver 
such  he  would  be  entitled  to  pay.  If  he  did  not,  it  could  hardly  be 
claimed  that  he  could  require  acceptance  on  the  ground  that  the  stone 
was  suitable,  or  better  adapted,  to  the  purpose  of  the  plaintiff  than 
as  though  made  according  to  direction.  Clearly,  if  plaintiff  had  fur- 
nished specifications,  and  had  a  right  to  insist  on  the  stone  being  in 
conformity  thereto,  regardless  of  defendant's  judgment,  it  could  not 
sustain  the  proposition  that  the  law  should  imply  a  warranty  to  make 
them  conform  to  some  other  test;  and  manifestly  it  cannot  be  said 
that  knowledge  of  the  use  intended  should  require  defendant  to  vary 


BREACH   OF   WARRANTY — RIGHTS   AFTER   ACCEPTANCE  2S1 

from  his  contract  as  to  dimensions.    The  conclusion  appears  to  us  ir- 
resistible that  no  such  warranty  as  this  can  be  implied. 

Breen  v.  Moran,  51  Minn.  525,  53  X.  W.  755,  is  cited  as  a  case 
"upon  all  fours"  with  this,  but  we  infer  from  a  perusal  of  that  c 
that  the  contractor  there  undertook  to  furnish  stone  for  a  particular 
purpose  which  he  understood.  And  in  that  case  the  court  based  the 
right  to  recover  upon  a  warranty,  and  not  the  failure  to  perform  a 
condition  precedent;  thus  recognizing  the  rule  of  law  stated.  The 
distinction  between  conditions  precedent  and  warranty  is  clearly  re< 
nized  in  the  Minnesota  cases  cited  in  Breen  v.  Moran.  See  Maxwell 
v.  Lee,  34  Minn.  511,  27  N.  W.  196;  Thompson  v.  Libbv,  35  Minn. 
443,  29  N.  W.  150. 

An  examination  of  the  brief  of  the  plaintiff's  counsel  will  show  that 
all  of  the  cases  cited  are  based  on  the  existence  of  a  warranty.     In 
this  respect  they  are  in  harmony  with   the  cases  cited  by  oppo- 
counsel.    See  Potter  v.  Lee.  94  Mich.  140,  53  N.  W.  1047.    We  nol 
one  or  two  that  seem  to  rest  upon  facts  leading  to  the  inference  that 
a  warranty  may  have  been  found  from  a  bare  promise  to  deliver  go 
of  a  given  description.     Such  is  perhaps  the  rule  in  South  Carolina, 
and  possibly  other  states.     But  if  such  can  be  called  a  warranty,  it 
is  an  express  warranty,  and  in  this  case  would  be  a  warranty  to  de- 
liver stone  according  to  specification,  and  not  a  warranty  to  del' 
those  fit  for  the  purpose  that  plaintiff  had  in  hand,  whatever  that  n 
have  been.    The  correctness  of  those  decisions  may  be  questioned  in 
view  of  the  English  and  American  cases  in  opposition  to  them.     They 
seem  to  be  based  upon  language  of  Mr.  Starkie  in  hi-  work  "n  I 
dence,  and  a  discussion  to  be  found  in  notes  to  the  case  of  Cutter  \ 
Powell  in  2  Smith,  Lead.  Cas.  1,  substantially  implying  that  when  the 
vendee  uses  the  goods  to  prevent  loss  or  injury  the  rule  should 
apply.     See  Cox  v.  Long,  69  \T.  C.  7;   2  Smith,  Lead.  C  th  Am 

Ed.)  p.  36.     Hut  as  counsel  has  not  discussed  the  point,  <>r  planted 
their  case  upon  any  such  claim,  we  do  not  feel  called  upon  or  at  lib< 
to  discuss  or  decide  the  question. 

It  was  claimed  by  the  plaintiff  that  tin-  defendant  came  to  1  ■■ 
and  agreed  to  pay  for  the  work  in  question.    The  court  instructed  th< 
jury  that  plaintiff  should  recover  if  they  found  such  to  be  tl  ■ 
which  was  as  favorable  a  chai  plaintiff  was  entitled  to.    T 

view  of  the  case  renders  it  ui  ary  t.>  'ion  in 

lation  to  the  admi    ion  of  evidence  of  the  meanin  ■  of  the  term 
b.,"  plaintiff  t  injured  by  the  evidence.    The  judgment 

must  be  affirmed.     The  other  justices  concurs 


ACTIONS    FOR    BREACH    OF    CONTRACT 


4.  Diminution  of  Damages— Recoupment 


NORTHWESTERN  CORDAGE  CO.  v.  RICE. 

(Supreme  Court  of  North  Dakota,  1S96.     5  N.  D.  432,  67  N.  W.  298,  57  Am. 

St.  Rep.  563.) 

Sec  ante,  p.  275,  for  a  report  of  the  case. 


TALBOT  PAVING  CO.  v.  GORMAN. 

(Supreme  Court  of  Michigan,  1S94.    103  Mich.  403,  61  N.  W.  655,  27  L.  R.  A.  96.) 
See,  ante,  p.  279,  for  a  report  of  the  case. 


UNDERWOOD  v.  WOLF. 

(Supreme  Court  of  Illinois,  1S90.    131  111.  425,  23  N.  E.  598,  19  Am.  St.  Rep.  40.) 

Action  by  Frederick  W.  Wolf  against  Phineas  L.  Underwood,  James 
Viles,  Jr.,  and  Thomas  Jordan  to  recover  the  price  of  refrigerating 
machines  and  apparatus  furnished  and  set  up  by  plaintiff  for  defend- 
ants in  their  packing-house  under  a  written  contract.  Plaintiff  ob- 
tained judgment,  which  was  affirmed  by  the  appellate  court.  Defend- 
ants appeal. 

Magruder,  J.8  The  contract  bears  date  February  8,  1886.  By 
its  terms  the  appellee  was  to  furnish  and  erect  the  refrigerating  ma- 
chinery, with  engine,  pump,  pipes,  etc.,  in  the  packing-house  of  ap- 
pellants, and  have  the  same  in  complete  working  order  by  the  8th  day 
of  May,  1886.  The  evidence  tends  to  show  that  the  whole  plant  was 
not  ready  for  use  until  the  1st  day  of  July,  1886.     *     *     * 

But  the  main  controversy  between  the  parties  arises  upon  the  fol- 
lowing provision  in  the  contract :  "And  it  is  further  agreed  *  *  * 
that  if  the  machines  have  fulfilled  the  guaranties  made  for  them  in 
this  agreement  by  1st  of  September,  1886,  then  said  party  of  the  sec- 
ond part  [appellants]  shall  accept  the  same;  and  all  payments  to  be 
made  after  the  payment  to  be  made  on  July  1,  1886,  shall  be  promis- 
sory notes,  dated  on  the  day  of  acceptance  of  the  plant,  with  interest 
after  maturity."  The  defendants  refused  to  give,  and  have  never 
given,  the  notes  thus  provided  for.  What  are  the  guaranties  which 
were  to  be  fulfilled?  The  plaintiff,  Wolf,  agreed  and  guarantied  that 
the  machine  would  maintain  certain  degrees  of  cooling  temperature 
in  certain  rooms  in  the  packing-house,  and  would  cool  the  rooms  with- 
in a  certain  specified  time;    that  it  would  cool  a  certain  number  of 

a  Part  of  the  opinion  is  omitted. 


BREACH   OF    WARRANTY — RIGHTS   AETER   ACCEPTANCE  283 

hogs,  of  a  specified  weight,  within  a  specified  time;  that  the  power 
required  to  drive  the  machinery  should  not  exceed  a  certain  limit ; 
that  the  fuel  required  to  produce  the  steam  to  do  the  work  of  the  en- 
gines should  not  exceed  a  certain  amount ;  that  the  loss  of  ammonia 
in  doing  the  work  should  not  exceed  a  certain  number  of  pounds ; 
that  the  refrigerating  machines  should  be  of  the  best  material  and 
workmanship ;  that  the  engine  should  be  capable  of  running  the  pack- 
ing-house machinery  in  addition  to  the  compresses ;  that  the  iron  pip- 
ing to  be  furnished  should  be  such  as  would  be  necessary  to  carry 
and  convey  the  brine  required  for  the  proper  cooling  of  the  rooms. 

In  considering  the  nature  of  these  guaranties  it  is  unnecessary  to 
discuss  any  nice  distinctions  between  warranties  on  the  one  side,  and 
conditions  precedent  or  descriptions  of  the  property  on  the  other.  It 
is  sufficient  that  the  guaranties  are  treated  as  warranties,  and  their 
non-fulfillment,  if  they  were  not  fulfilled,  will  be  regarded  as  a  breach 
of  warranty.  Inasmuch  as  the  plant  was  to  be  completed  by  May  8, 
18S6,  and  was  to  be  accepted  if  the  guaranties  were  fulfilled  by  Sep- 
tember 1,  1886,  it  is  manifest  that  the  period  between  these  two  dates 
was  to  be  made  use  of  for  the  purpose  of  testing  the  machines,  in 
order  to  ascertain  whether  or  not  they  were  such  as  they  were  guar- 
antied to  be.  It  is  also  sufficiently  manifest  that,  if  the  machines  failed 
in  any  of  the  particulars  named  in  the  guaranties,  the  defects  which 
would  thus  be  shown  to  exist  must  be  regarded  as  patent  defects,  as 
contradistinguished  from  latent  defects.  Where  there  is  a  sale  and 
delivery  of  personal  property  in  praesenti,  with  express  warranty,  and 
the  property  turns  out  to  be  defective,  the  vendee  may  receive  and  use 
the  property  and  sue  for  damages  on  a  breach  of  the  warranty ;  or, 
when  sued  for  the  purchase  price,  he  may  recoup  such  damages  under 
the  general  issue,  or  set  them  up  in  a  special  plea  of  set-off.  This  is 
a  well-settled  rule. 

In  the  present  case  the  contract  is  executory.  The  title  to  the  prop- 
erty did  not  vest  in  the  purchaser  until  the  period  for  making  the  test 
had  passed.  It  has  been  held  in  some  states  that  where  the  contract 
is  thus  executory,  and  a  time  is  fixed  for  making  a  test,  the  acceptance 
and  use  of  the  property,  after  such  time  has  passed,  amount  to  a  waiv- 
er of  the  right  to  claim  damages  for  a  breach  of  the  warranty.  But 
such  is  not  the  law  in  this  state.  In  the  present  case  the  evidence  tends 
how  that  the  defendants  took  possession  about  July  1,  1886,  of  the 
machines  placed  in  their  packing-house  by  the  plaintiff,  and  bad  b 
using  the  same  up  to  the  time  of  the  trial  of  the  cause  in  the  court 
below.  The  chief  complaint  of  the  appellants  is  that,  under  the  in- 
structions given  by  the  trial  court,  the  jury  were  led  to  regard  the 
nee  and  u  e  of  the  machinery  by  the  defendants  as  an  aban 
donment  of  all  right  to  damages  for  breach  of  the  warranties.  We 
are  unable  to  regard  tin's  complaint  as  well  founded.  We  agree  with 
the  I  for  appellants,  in  the  main,  in  their  view  of  the  law.    Wc 

think  that,  even  where  the  contract  is  executory,  the  claim   for  dam- 


284  'ACTIONS    FOR    BREACH    OF    CONTRACT 

ages  on  account  of  a  breach  of  the  warranty  will  survive  the  accept- 
ance of  the  property.  Chitty  on  Contracts,  (11th  Ed.)  at  page  652, 
says:  "Where,  therefore,  the  vendor  of  a  warranted  article,  whether 
it  be  a  specific  chattel  or  not,  sues  for  the  price  or  value,  it  is  compe- 
tent to  the  purchaser,  in  all  cases,  to  prove  the  breach  of  warranty  in 
reduction  of  damages,  and  the  sum  to  be  recovered  for  the  price  of 
the  article  will  be  reduced  by  so  much  as  the  article  was  diminished  in 
value  by  non-compliance  with  the  warranty."  The  previous  discus- 
sion of  the  authorities  by  the  author,  before  arriving  at  the  conclusion 
thus  announced,  shows  his  meaning  to  be  that  the  breach  of  the  war- 
ranty may  be  proven  in  reduction  of  damages,  not  only  in  the  case  of 
the  sale  of  a  specific  chattel,  but  also  in  the  case  of  an  executory  con- 
tract ;  as,  for  example,  "where  an  article  is  ordered  from  a  manu- 
facturer who  contracts  that  it  shall  be  of  a  certain  quality  or  fit  for  a 
certain  purpose."    Id.  647-652. 

In  Benjamin  on  Sales,  (volume  2,  §  1356,  4th  Amer.  Ed.,)  it  is  said: 
"The  buyer  will  also  lose  his  right  of  returning  goods  delivered  to  him 
under  a  warranty  of  quality,  if  he  has  shown  by  his  conduct  an  ac- 
ceptance of  them,  or  if  he  has  retained  them  a  longer  time  than  was 
reasonable  for  a  trial,  or  has  consumed  more  than  was  necessary  for 
testing  them,  or  has  exercised  acts  of  ownership,  as  by  offering  to  re- 
sell them;  all  of  which  acts  show  an  agreement  to  accept  the  goods, 
but  do  not  constitute  an  abandonment  of  his  remedy  by  cross-action, 
or  now  by  a  counter-claim  in  the  vendor's  action  for  the  price."  If 
the  retention  of  the  property  by  the  buyer  for  a  longer  time  than  is 
reasonable  for  a  trial  does  not  waive  his  right  to  damages  in  an  action 
by  the  vendor  for  the  purchase  price,  then  there  is  no  reason  why  his 
retention  of  the  property  for  a  longer  time  than  that  fixed  in  the  con- 
tract for  a  trial  should  amount  to  such  waiver. 

The  rule,  as  announced  by  these  textwriters,  has  been  held  to  be  the 
law  in  this  state.  In  Babcock  v.  Trice,  18  111.  420,  68  Am.  Dec.  560, 
there  was  an  executory  contract  for  the  sale  and  delivery  of  corn, 
with  an  implied  warranty  that  it  should  be  of  a  fair  and  merchantable 
quality.  It  was  there  said:  "It  is  true  that  the  acceptance  of  corn 
under  an  executory  contract,  with  opportunity  of  inspection  at  the 
time  of  delivery,  without  complaint,  may  raise  a  presumption  that  it 
was  of  the  quality  contemplated  by  the  parties;  but  it  will  not  pre- 
clude the  party  from  showing  and  setting  up  the  actual  defect  in  qual- 
ity and  condition.  *  *  *  He  could,  *  *  *  under  the  general 
issue,  prove  the  facts  out  of  which  the  warranty  arose,  the  breach, 
and  his  damages  by  way  of  recoupment,"  etc.  Crabtree  v.  Kile,  21 
111.  184.  In  Strawn  v.  Cogswell,  28  111.  457,  which  was  a  petition  for 
a  mechanic's  lien  founded  upon  a  contract  to  furnish  iron  castings  for 
a  grist-mill,  and  where  the  defense  was  that  the  work  was  not  done 
in  a  workman-like  manner,  and  the  materials  were  not  of  the  quality 
required  by  the  contract,  we  said:  "Improvements  of  this  description 
being  permanent  and  fixed,  and  requiring  skill  to  test  their  sufficiency^ 


BREACH    OF   WARRANTY — RIGHTS   AFTER   ACCEPTANCE  285 

their  being  received  and  being  put  to  use  is  not  such  an  acceptance  as  es- 
tops the  party  from  claiming  damages  for  their  being  defective." 

In  the  case  at  bar  the  refrigerating  machines  were  so  built  into  the 
packing-house,  and  so  much  a  part  thereof,  that  their  rem  mid 

only  have  been  accomplished  with  difficulty,  and  perhaps  with  injury 
to  the  house  itself.     The  mere  use  of  them  by  the  defendant 
September  1,  1886,  might  not,  of  itself,  amount  to  such  an  i 
as  would  preclude  them  from  claiming  damages  for  d 
Nichols,  41  111.  207,  89  Am.  Dec.  381;    Peck  v.  [11.  54. 

In  Doane  v.  Dunham,  65  111.  512,  and  same  case,  79  111.  131,  the 
tinction  between   executory  and  executed  contracts  was   r 
and  it  was  held  that,  in  the  former,  the  law  gives  the  buyer  a  I 
able  time  for  making  an  examination  of  the  chattels  sold;    that  ; 
for  the  jury  to  determine,  under  all  the  circumstances,  what  is  such 
reasonable  time;    that  a   failure  to  make   the  examination  within   a 
reasonable  time  may  preclude  the  buyer  from  offering  the  property 
back,  rescinding  the  contract,  and  avoiding  payment  on  th;  ind, 

but  will  not  deprive  him  of  the  right  to  rely  upon  the  breach  of  the 
warranty  for  damages. 

The  only  difference  between  that  case  and  the  one  at  bar  is  that 
there  the  law  gives  time  for  examination  or  test,  while  here  th 
tract  fixes  the  time.    The  same  rule,  however,  will  apply  to 
Estep  v.  Fenton,  66  111.  467.    In  Owens  v.  Stui  7  111.  366,  it 

held  that,  where  the  contract  is  unexecuted,  the  buyer  may  retain  the 
property,  and  show  the  warranty  and  breach  to  re- luce  the  n 
even  though  he  neglected  to  return  the  property  u  of 

the  breach.     In  Farmer  Co.  v.  Taylor,  69  111.  440,  18  Am.  Rep.  621, 
the  contract  was  to  set  up  a  printing-press  in  complete  run! 
in  the  defendant's  press-room,  within  70  days  from  the  a 
the  plaintiff's  proposition,  with  warranty  that  the  ] 
complete  satisfaction,  and  granting  to  the   defendant   30  daj 
from  the  setting  up  of  the  press  to  decide  whether  the  wai 
good.    The  defendant  gave  no  notice  of  its  intention  alter  tl 

I  passed,  but  kept  the  press.     It  was  held  that  tl 
of  the  press  indi  ting  of  the  title  in  the  buyer,  and  that 

the  defendant  could  recoup  his  damages  from  the  contract  i 

there  had  been  a  breach  of  the  warranty. 

We  arc  therefore  of  the  opinion  that  the  defendanl 
in  the  case  at  bar,  to  aim  for  the  com 

price  of  the  machin  h  'Inn  wei     able  to  -how  that 

they  had  sustained  from  a  failure  to  fulfill  the  guaranties,  if  there 

such  a  failure.     *     *     *     Affirm 


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